Correlation Between Mainstay Tax and Mainstay Balanced
Can any of the company-specific risk be diversified away by investing in both Mainstay Tax and Mainstay Balanced 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 Tax and Mainstay Balanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mainstay Tax Free and Mainstay Balanced Fund, you can compare the effects of market volatilities on Mainstay Tax and Mainstay Balanced 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 Tax with a short position of Mainstay Balanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Tax and Mainstay Balanced.
Diversification Opportunities for Mainstay Tax and Mainstay Balanced
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Mainstay and Mainstay is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Tax Free and Mainstay Balanced Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Balanced and Mainstay Tax 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 Tax Free are associated (or correlated) with Mainstay Balanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Balanced has no effect on the direction of Mainstay Tax i.e., Mainstay Tax and Mainstay Balanced go up and down completely randomly.
Pair Corralation between Mainstay Tax and Mainstay Balanced
Assuming the 90 days horizon Mainstay Tax is expected to generate 2.51 times less return on investment than Mainstay Balanced. But when comparing it to its historical volatility, Mainstay Tax Free is 1.99 times less risky than Mainstay Balanced. It trades about 0.13 of its potential returns per unit of risk. Mainstay Balanced Fund is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 3,012 in Mainstay Balanced Fund on September 1, 2024 and sell it today you would earn a total of 296.00 from holding Mainstay Balanced Fund or generate 9.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mainstay Tax Free vs. Mainstay Balanced Fund
Performance |
| Timeline |
| Mainstay Tax Free |
| Mainstay Balanced |
Mainstay Tax and Mainstay Balanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay Tax and Mainstay Balanced
The main advantage of trading using opposite Mainstay Tax and Mainstay Balanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Tax position performs unexpectedly, Mainstay Balanced 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 Balanced will offset losses from the drop in Mainstay Balanced's long position.| Mainstay Tax vs. Inverse Government Long | Mainstay Tax vs. Prudential Government Income | Mainstay Tax vs. Fidelity Series Government | Mainstay Tax vs. Dreyfus Government Cash |
| Mainstay Balanced vs. Mainstay Tax Free | Mainstay Balanced vs. Mainstay Large Cap | Mainstay Balanced vs. Mainstay Large Cap | Mainstay Balanced 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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