Correlation Between Mainstay High and Mainstay Vertible
Can any of the company-specific risk be diversified away by investing in both Mainstay High and Mainstay Vertible 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 Mainstay Vertible 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 Mainstay Vertible Fund, you can compare the effects of market volatilities on Mainstay High and Mainstay Vertible 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 Mainstay Vertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay High and Mainstay Vertible.
Diversification Opportunities for Mainstay High and Mainstay Vertible
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mainstay and Mainstay is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay High Yield and Mainstay Vertible Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Vertible 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 Mainstay Vertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Vertible has no effect on the direction of Mainstay High i.e., Mainstay High and Mainstay Vertible go up and down completely randomly.
Pair Corralation between Mainstay High and Mainstay Vertible
Assuming the 90 days horizon Mainstay High is expected to generate 1.36 times less return on investment than Mainstay Vertible. But when comparing it to its historical volatility, Mainstay High Yield is 2.34 times less risky than Mainstay Vertible. It trades about 0.15 of its potential returns per unit of risk. Mainstay Vertible Fund is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,674 in Mainstay Vertible Fund on September 1, 2024 and sell it today you would earn a total of 273.00 from holding Mainstay Vertible Fund or generate 16.31% 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. Mainstay Vertible Fund
Performance |
| Timeline |
| Mainstay High Yield |
| Mainstay Vertible |
Mainstay High and Mainstay Vertible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay High and Mainstay Vertible
The main advantage of trading using opposite Mainstay High and Mainstay Vertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay High position performs unexpectedly, Mainstay Vertible 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 Mainstay Vertible will offset losses from the drop in Mainstay Vertible's long position.| Mainstay High vs. American Funds Retirement | Mainstay High vs. Pro Blend Moderate Term | Mainstay High vs. Dimensional Retirement Income | Mainstay High vs. Jp Morgan Smartretirement |
| Mainstay Vertible vs. Rationalpier 88 Convertible | Mainstay Vertible vs. Fidelity Sai Convertible | Mainstay Vertible vs. Harbor Vertible Securities | Mainstay Vertible vs. Calamos Dynamic Convertible |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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