Correlation Between Mainstay High and Pace High
Can any of the company-specific risk be diversified away by investing in both Mainstay High and Pace High 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 Pace High 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 Pace High Yield, you can compare the effects of market volatilities on Mainstay High and Pace High 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 Pace High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay High and Pace High.
Diversification Opportunities for Mainstay High and Pace High
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Mainstay and Pace is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay High Yield and Pace High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pace High Yield 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 Pace High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pace High Yield has no effect on the direction of Mainstay High i.e., Mainstay High and Pace High go up and down completely randomly.
Pair Corralation between Mainstay High and Pace High
Assuming the 90 days horizon Mainstay High is expected to generate 1.41 times less return on investment than Pace High. In addition to that, Mainstay High is 1.08 times more volatile than Pace High Yield. It trades about 0.21 of its total potential returns per unit of risk. Pace High Yield is currently generating about 0.32 per unit of volatility. If you would invest 851.00 in Pace High Yield on September 3, 2024 and sell it today you would earn a total of 48.00 from holding Pace High Yield or generate 5.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mainstay High Yield vs. Pace High Yield
Performance |
| Timeline |
| Mainstay High Yield |
| Pace High Yield |
Mainstay High and Pace High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay High and Pace High
The main advantage of trading using opposite Mainstay High and Pace High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay High position performs unexpectedly, Pace High 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 Pace High will offset losses from the drop in Pace High's long position.| Mainstay High vs. Goldman Sachs Short | Mainstay High vs. Oppenheimer Gold Special | Mainstay High vs. First Eagle Gold | Mainstay High vs. James Balanced Golden |
| Pace High vs. Sarofim Equity | Pace High vs. Ultra Short Fixed Income | Pace High vs. Artisan Select Equity | Pace High vs. Cutler 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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