Correlation Between Mainstay Government and Mainstay Balanced
Can any of the company-specific risk be diversified away by investing in both Mainstay Government and Mainstay Balanced at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Mainstay Government and Mainstay Balanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mainstay Government Fund and Mainstay Balanced Fund, you can compare the effects of market volatilities on Mainstay Government and Mainstay Balanced and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Mainstay Government with a short position of Mainstay Balanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Government and Mainstay Balanced.
Diversification Opportunities for Mainstay Government and Mainstay Balanced
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mainstay and Mainstay is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Government Fund and Mainstay Balanced Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Balanced and Mainstay Government is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Mainstay Government Fund are associated (or correlated) with Mainstay Balanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Balanced has no effect on the direction of Mainstay Government i.e., Mainstay Government and Mainstay Balanced go up and down completely randomly.
Pair Corralation between Mainstay Government and Mainstay Balanced
Assuming the 90 days horizon Mainstay Government is expected to generate 2.59 times less return on investment than Mainstay Balanced. But when comparing it to its historical volatility, Mainstay Government Fund is 1.3 times less risky than Mainstay Balanced. It trades about 0.08 of its potential returns per unit of risk. Mainstay Balanced Fund is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 3,004 in Mainstay Balanced Fund on August 31, 2024 and sell it today you would earn a total of 286.00 from holding Mainstay Balanced Fund or generate 9.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mainstay Government Fund vs. Mainstay Balanced Fund
Performance |
| Timeline |
| Mainstay Government |
| Mainstay Balanced |
Mainstay Government and Mainstay Balanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay Government and Mainstay Balanced
The main advantage of trading using opposite Mainstay Government and Mainstay Balanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Government position performs unexpectedly, Mainstay Balanced can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Mainstay Balanced will offset losses from the drop in Mainstay Balanced's long position.| Mainstay Government vs. Principal Lifetime Hybrid | Mainstay Government vs. Jhancock Disciplined Value | Mainstay Government vs. T Rowe Price | Mainstay Government vs. Federated Kaufmann Large |
| Mainstay Balanced vs. Prudential Jennison Financial | Mainstay Balanced vs. Icon Financial Fund | Mainstay Balanced vs. Fidelity Advisor Financial | Mainstay Balanced vs. Goldman Sachs Financial |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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