Correlation Between Mainstay High and Victory Rs
Can any of the company-specific risk be diversified away by investing in both Mainstay High and Victory Rs 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 Victory Rs 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 Victory Rs Value, you can compare the effects of market volatilities on Mainstay High and Victory Rs 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 Victory Rs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay High and Victory Rs.
Diversification Opportunities for Mainstay High and Victory Rs
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mainstay and Victory is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay High Yield and Victory Rs Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victory Rs Value 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 Victory Rs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victory Rs Value has no effect on the direction of Mainstay High i.e., Mainstay High and Victory Rs go up and down completely randomly.
Pair Corralation between Mainstay High and Victory Rs
Assuming the 90 days horizon Mainstay High is expected to generate 6.35 times less return on investment than Victory Rs. But when comparing it to its historical volatility, Mainstay High Yield is 5.73 times less risky than Victory Rs. It trades about 0.23 of its potential returns per unit of risk. Victory Rs Value is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 2,882 in Victory Rs Value on August 28, 2024 and sell it today you would earn a total of 141.00 from holding Victory Rs Value or generate 4.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mainstay High Yield vs. Victory Rs Value
Performance |
| Timeline |
| Mainstay High Yield |
| Victory Rs Value |
Mainstay High and Victory Rs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay High and Victory Rs
The main advantage of trading using opposite Mainstay High and Victory Rs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay High position performs unexpectedly, Victory Rs 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 Victory Rs will offset losses from the drop in Victory Rs' long position.| Mainstay High vs. Mainstay Tax Free | Mainstay High vs. Mainstay Income Builder | Mainstay High vs. Mainstay Large Cap | Mainstay High vs. Mainstay Large Cap |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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