Correlation Between Mainstay High and Diversified Income
Can any of the company-specific risk be diversified away by investing in both Mainstay High and Diversified 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 Diversified 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 Diversified Income Fund, you can compare the effects of market volatilities on Mainstay High and Diversified 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 Diversified Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay High and Diversified Income.
Diversification Opportunities for Mainstay High and Diversified Income
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mainstay and Diversified is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay High Yield and Diversified Income Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diversified Income 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 Diversified Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diversified Income has no effect on the direction of Mainstay High i.e., Mainstay High and Diversified Income go up and down completely randomly.
Pair Corralation between Mainstay High and Diversified Income
Assuming the 90 days horizon Mainstay High is expected to generate 1.62 times less return on investment than Diversified Income. But when comparing it to its historical volatility, Mainstay High Yield is 1.26 times less risky than Diversified Income. It trades about 0.09 of its potential returns per unit of risk. Diversified Income Fund is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 965.00 in Diversified Income Fund on November 4, 2024 and sell it today you would earn a total of 6.00 from holding Diversified Income Fund or generate 0.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mainstay High Yield vs. Diversified Income Fund
Performance |
| Timeline |
| Mainstay High Yield |
| Diversified Income |
Mainstay High and Diversified Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay High and Diversified Income
The main advantage of trading using opposite Mainstay High and Diversified Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay High position performs unexpectedly, Diversified 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 Diversified Income will offset losses from the drop in Diversified Income's long position.| Mainstay High vs. Firsthand Alternative Energy | Mainstay High vs. Invesco Energy Fund | Mainstay High vs. Alpsalerian Energy Infrastructure | Mainstay High vs. Goehring Rozencwajg Resources |
| Diversified Income vs. Mainstay High Yield | Diversified Income vs. Investment Grade Porate | Diversified Income vs. Commodityrealreturn Strategy Fund | Diversified Income vs. Blackrock Core Bond |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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