Correlation Between Mainstay High and Mainstay Growth
Can any of the company-specific risk be diversified away by investing in both Mainstay High and Mainstay Growth 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 Growth 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 Growth Allocation, you can compare the effects of market volatilities on Mainstay High and Mainstay Growth 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 Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay High and Mainstay Growth.
Diversification Opportunities for Mainstay High and Mainstay Growth
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mainstay and Mainstay is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay High Yield and Mainstay Growth Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Growth Allo 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 Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Growth Allo has no effect on the direction of Mainstay High i.e., Mainstay High and Mainstay Growth go up and down completely randomly.
Pair Corralation between Mainstay High and Mainstay Growth
Assuming the 90 days horizon Mainstay High is expected to generate 1.98 times less return on investment than Mainstay Growth. But when comparing it to its historical volatility, Mainstay High Yield is 4.6 times less risky than Mainstay Growth. It trades about 0.18 of its potential returns per unit of risk. Mainstay Growth Allocation is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,541 in Mainstay Growth Allocation on August 27, 2024 and sell it today you would earn a total of 170.00 from holding Mainstay Growth Allocation or generate 11.03% 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 Growth Allocation
Performance |
| Timeline |
| Mainstay High Yield |
| Mainstay Growth Allo |
Mainstay High and Mainstay Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay High and Mainstay Growth
The main advantage of trading using opposite Mainstay High and Mainstay Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay High position performs unexpectedly, Mainstay Growth 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 Growth will offset losses from the drop in Mainstay Growth's long position.| Mainstay High vs. Franklin Government Money | Mainstay High vs. T Rowe Price | Mainstay High vs. Dreyfus Institutional Reserves | Mainstay High vs. Blackrock Funds Iii |
| Mainstay Growth vs. Mainstay High Yield | Mainstay Growth vs. Mainstay Tax Free | Mainstay Growth vs. Mainstay Income Builder | Mainstay Growth vs. Mainstay Large Cap |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Commodity Directory Find actively traded commodities issued by global exchanges |