Correlation Between Mainstay Government and Mainstay Floating
Can any of the company-specific risk be diversified away by investing in both Mainstay Government and Mainstay Floating 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 Floating 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 Floating Rate, you can compare the effects of market volatilities on Mainstay Government and Mainstay Floating 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 Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Government and Mainstay Floating.
Diversification Opportunities for Mainstay Government and Mainstay Floating
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Mainstay and Mainstay is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Government Fund and Mainstay Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Floating Rate 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 Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Floating Rate has no effect on the direction of Mainstay Government i.e., Mainstay Government and Mainstay Floating go up and down completely randomly.
Pair Corralation between Mainstay Government and Mainstay Floating
Assuming the 90 days horizon Mainstay Government is expected to generate 2.07 times less return on investment than Mainstay Floating. In addition to that, Mainstay Government is 2.44 times more volatile than Mainstay Floating Rate. It trades about 0.05 of its total potential returns per unit of risk. Mainstay Floating Rate is currently generating about 0.23 per unit of volatility. If you would invest 740.00 in Mainstay Floating Rate on August 30, 2024 and sell it today you would earn a total of 150.00 from holding Mainstay Floating Rate or generate 20.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mainstay Government Fund vs. Mainstay Floating Rate
Performance |
| Timeline |
| Mainstay Government |
| Mainstay Floating Rate |
Mainstay Government and Mainstay Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay Government and Mainstay Floating
The main advantage of trading using opposite Mainstay Government and Mainstay Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Government position performs unexpectedly, Mainstay Floating 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 Floating will offset losses from the drop in Mainstay Floating's long position.| Mainstay Government vs. The Gabelli Small | Mainstay Government vs. Davenport Small Cap | Mainstay Government vs. T Rowe Price | Mainstay Government vs. Jhancock Diversified Macro |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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