Correlation Between Mainstay High and Jpmorgan
Can any of the company-specific risk be diversified away by investing in both Mainstay High and Jpmorgan 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 Jpmorgan 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 Jpmorgan Equity Fund, you can compare the effects of market volatilities on Mainstay High and Jpmorgan 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 Jpmorgan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay High and Jpmorgan.
Diversification Opportunities for Mainstay High and Jpmorgan
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mainstay and Jpmorgan is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay High Yield and Jpmorgan Equity Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Equity 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 Jpmorgan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Equity has no effect on the direction of Mainstay High i.e., Mainstay High and Jpmorgan go up and down completely randomly.
Pair Corralation between Mainstay High and Jpmorgan
Assuming the 90 days horizon Mainstay High is expected to generate 7.25 times less return on investment than Jpmorgan. But when comparing it to its historical volatility, Mainstay High Yield is 5.56 times less risky than Jpmorgan. It trades about 0.15 of its potential returns per unit of risk. Jpmorgan Equity Fund is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 2,493 in Jpmorgan Equity Fund on September 2, 2024 and sell it today you would earn a total of 252.00 from holding Jpmorgan Equity Fund or generate 10.11% 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. Jpmorgan Equity Fund
Performance |
| Timeline |
| Mainstay High Yield |
| Jpmorgan Equity |
Mainstay High and Jpmorgan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay High and Jpmorgan
The main advantage of trading using opposite Mainstay High and Jpmorgan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay High position performs unexpectedly, Jpmorgan 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 Jpmorgan will offset losses from the drop in Jpmorgan's long position.| Mainstay High vs. Mainstay Tax Free | Mainstay High vs. Mainstay Large Cap | 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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