Correlation Between Mainstay High and Investment Grade
Can any of the company-specific risk be diversified away by investing in both Mainstay High and Investment Grade 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 Investment Grade 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 Investment Grade Porate, you can compare the effects of market volatilities on Mainstay High and Investment Grade 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 Investment Grade. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay High and Investment Grade.
Diversification Opportunities for Mainstay High and Investment Grade
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mainstay and Investment is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay High Yield and Investment Grade Porate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investment Grade Porate 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 Investment Grade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investment Grade Porate has no effect on the direction of Mainstay High i.e., Mainstay High and Investment Grade go up and down completely randomly.
Pair Corralation between Mainstay High and Investment Grade
Assuming the 90 days horizon Mainstay High Yield is expected to generate 0.52 times more return on investment than Investment Grade. However, Mainstay High Yield is 1.94 times less risky than Investment Grade. It trades about 0.17 of its potential returns per unit of risk. Investment Grade Porate is currently generating about 0.07 per unit of risk. If you would invest 460.00 in Mainstay High Yield on September 4, 2024 and sell it today you would earn a total of 65.00 from holding Mainstay High Yield or generate 14.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Mainstay High Yield vs. Investment Grade Porate
Performance |
| Timeline |
| Mainstay High Yield |
| Investment Grade Porate |
Mainstay High and Investment Grade Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay High and Investment Grade
The main advantage of trading using opposite Mainstay High and Investment Grade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay High position performs unexpectedly, Investment Grade 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 Investment Grade will offset losses from the drop in Investment Grade's long position.| Mainstay High vs. Balanced Fund Investor | Mainstay High vs. Volumetric Fund Volumetric | Mainstay High vs. Omni Small Cap Value | Mainstay High vs. Small Cap Stock |
| Investment Grade vs. Angel Oak Multi Strategy | Investment Grade vs. Artisan Emerging Markets | Investment Grade vs. Growth Strategy Fund | Investment Grade vs. T Rowe Price |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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