Correlation Between Mainstay High and Mainstay Income
Can any of the company-specific risk be diversified away by investing in both Mainstay High and Mainstay Income 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 High and Mainstay Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mainstay High Yield and Mainstay Income Builder, you can compare the effects of market volatilities on Mainstay High and Mainstay Income 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 High with a short position of Mainstay Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay High and Mainstay Income.
Diversification Opportunities for Mainstay High and Mainstay Income
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mainstay and Mainstay is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay High Yield and Mainstay Income Builder in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Income Builder and Mainstay High 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 High Yield are associated (or correlated) with Mainstay Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Income Builder has no effect on the direction of Mainstay High i.e., Mainstay High and Mainstay Income go up and down completely randomly.
Pair Corralation between Mainstay High and Mainstay Income
Assuming the 90 days horizon Mainstay High is expected to generate 2.47 times less return on investment than Mainstay Income. But when comparing it to its historical volatility, Mainstay High Yield is 3.0 times less risky than Mainstay Income. It trades about 0.15 of its potential returns per unit of risk. Mainstay Income Builder is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 2,082 in Mainstay Income Builder on August 29, 2024 and sell it today you would earn a total of 29.00 from holding Mainstay Income Builder or generate 1.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mainstay High Yield vs. Mainstay Income Builder
Performance |
| Timeline |
| Mainstay High Yield |
| Mainstay Income Builder |
Mainstay High and Mainstay Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay High and Mainstay Income
The main advantage of trading using opposite Mainstay High and Mainstay Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay High position performs unexpectedly, Mainstay Income 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 Income will offset losses from the drop in Mainstay Income's long position.| Mainstay High vs. Alphacentric Lifesci Healthcare | Mainstay High vs. Baron Health Care | Mainstay High vs. Lord Abbett Health | Mainstay High vs. The Gabelli Healthcare |
| Mainstay Income vs. Mainstay Sp 500 | Mainstay Income vs. Mainstay Vertible Fund | Mainstay Income vs. Mainstay Large Cap | Mainstay Income vs. Mainstay Map Equity |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |