Correlation Between Mainstay Tax and Mainstay Common
Can any of the company-specific risk be diversified away by investing in both Mainstay Tax and Mainstay Common 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 Common 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 Mon Stock, you can compare the effects of market volatilities on Mainstay Tax and Mainstay Common 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 Common. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Tax and Mainstay Common.
Diversification Opportunities for Mainstay Tax and Mainstay Common
0.07 | Correlation Coefficient |
Significant 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 Mon Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Mon Stock 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 Common. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Mon Stock has no effect on the direction of Mainstay Tax i.e., Mainstay Tax and Mainstay Common go up and down completely randomly.
Pair Corralation between Mainstay Tax and Mainstay Common
Assuming the 90 days horizon Mainstay Tax is expected to generate 3.96 times less return on investment than Mainstay Common. But when comparing it to its historical volatility, Mainstay Tax Free is 3.51 times less risky than Mainstay Common. It trades about 0.13 of its potential returns per unit of risk. Mainstay Mon Stock is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 3,643 in Mainstay Mon Stock on September 1, 2024 and sell it today you would earn a total of 567.00 from holding Mainstay Mon Stock or generate 15.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Mainstay Tax Free vs. Mainstay Mon Stock
Performance |
| Timeline |
| Mainstay Tax Free |
| Mainstay Mon Stock |
Mainstay Tax and Mainstay Common Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay Tax and Mainstay Common
The main advantage of trading using opposite Mainstay Tax and Mainstay Common positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Tax position performs unexpectedly, Mainstay Common 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 Common will offset losses from the drop in Mainstay Common'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 Common vs. Mainstay Tax Free | Mainstay Common vs. Mainstay Large Cap | Mainstay Common vs. Mainstay Large Cap | Mainstay Common 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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