Correlation Between Mainstay Tax and Mainstay Total
Can any of the company-specific risk be diversified away by investing in both Mainstay Tax and Mainstay Total 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 Total 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 Total Return, you can compare the effects of market volatilities on Mainstay Tax and Mainstay Total 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 Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Tax and Mainstay Total.
Diversification Opportunities for Mainstay Tax and Mainstay Total
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mainstay and Mainstay is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Tax Free and Mainstay Total Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Total Return 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 Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Total Return has no effect on the direction of Mainstay Tax i.e., Mainstay Tax and Mainstay Total go up and down completely randomly.
Pair Corralation between Mainstay Tax and Mainstay Total
Assuming the 90 days horizon Mainstay Tax is expected to generate 1.14 times less return on investment than Mainstay Total. But when comparing it to its historical volatility, Mainstay Tax Free is 1.27 times less risky than Mainstay Total. It trades about 0.23 of its potential returns per unit of risk. Mainstay Total Return is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 916.00 in Mainstay Total Return on September 14, 2024 and sell it today you would earn a total of 10.00 from holding Mainstay Total Return or generate 1.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mainstay Tax Free vs. Mainstay Total Return
Performance |
| Timeline |
| Mainstay Tax Free |
| Mainstay Total Return |
Mainstay Tax and Mainstay Total Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay Tax and Mainstay Total
The main advantage of trading using opposite Mainstay Tax and Mainstay Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Tax position performs unexpectedly, Mainstay Total 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 Total will offset losses from the drop in Mainstay Total's long position.| Mainstay Tax vs. Mainstay Large Cap | Mainstay Tax vs. Mainstay Large Cap | Mainstay Tax vs. Mainstay Large Cap | Mainstay Tax vs. Mainstay Large Cap |
| Mainstay Total vs. Mainstay Tax Free | Mainstay Total vs. Mainstay Large Cap | Mainstay Total vs. Mainstay Large Cap | Mainstay Total 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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