Correlation Between Mainstay High and Iaadx
Can any of the company-specific risk be diversified away by investing in both Mainstay High and Iaadx 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 Iaadx 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 Iaadx, you can compare the effects of market volatilities on Mainstay High and Iaadx 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 Iaadx. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay High and Iaadx.
Diversification Opportunities for Mainstay High and Iaadx
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Mainstay and Iaadx is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay High Yield and Iaadx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iaadx 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 Iaadx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iaadx has no effect on the direction of Mainstay High i.e., Mainstay High and Iaadx go up and down completely randomly.
Pair Corralation between Mainstay High and Iaadx
Assuming the 90 days horizon Mainstay High Yield is expected to generate 0.76 times more return on investment than Iaadx. However, Mainstay High Yield is 1.32 times less risky than Iaadx. It trades about 0.08 of its potential returns per unit of risk. Iaadx is currently generating about 0.0 per unit of risk. If you would invest 520.00 in Mainstay High Yield on September 13, 2024 and sell it today you would earn a total of 3.00 from holding Mainstay High Yield or generate 0.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mainstay High Yield vs. Iaadx
Performance |
| Timeline |
| Mainstay High Yield |
| Iaadx |
Mainstay High and Iaadx Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay High and Iaadx
The main advantage of trading using opposite Mainstay High and Iaadx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay High position performs unexpectedly, Iaadx 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 Iaadx will offset losses from the drop in Iaadx's 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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