Correlation Between Mainstay High and Mainstay Floating
Can any of the company-specific risk be diversified away by investing in both Mainstay High and Mainstay Floating 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 Floating 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 Floating Rate, you can compare the effects of market volatilities on Mainstay High and Mainstay Floating 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 Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay High and Mainstay Floating.
Diversification Opportunities for Mainstay High and Mainstay Floating
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mainstay and Mainstay is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay High Yield and Mainstay Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Floating Rate 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 Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Floating Rate has no effect on the direction of Mainstay High i.e., Mainstay High and Mainstay Floating go up and down completely randomly.
Pair Corralation between Mainstay High and Mainstay Floating
Assuming the 90 days horizon Mainstay High Yield is expected to generate 3.74 times more return on investment than Mainstay Floating. However, Mainstay High is 3.74 times more volatile than Mainstay Floating Rate. It trades about 0.19 of its potential returns per unit of risk. Mainstay Floating Rate is currently generating about 0.22 per unit of risk. If you would invest 519.00 in Mainstay High Yield on September 5, 2024 and sell it today you would earn a total of 4.00 from holding Mainstay High Yield or generate 0.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Mainstay High Yield vs. Mainstay Floating Rate
Performance |
| Timeline |
| Mainstay High Yield |
| Mainstay Floating Rate |
Mainstay High and Mainstay Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay High and Mainstay Floating
The main advantage of trading using opposite Mainstay High and Mainstay Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay High position performs unexpectedly, Mainstay Floating 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 Floating will offset losses from the drop in Mainstay Floating's long position.| Mainstay High vs. M Large Cap | Mainstay High vs. Fidelity Series 1000 | Mainstay High vs. Avantis Large Cap | Mainstay High vs. Aqr Large Cap |
| Mainstay Floating vs. Mainstay High Yield | Mainstay Floating vs. Mainstay Tax Free | Mainstay Floating vs. Mainstay Income Builder | Mainstay Floating 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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