Correlation Between Mainstay Tax and Mainstay Conservative
Can any of the company-specific risk be diversified away by investing in both Mainstay Tax and Mainstay Conservative 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 Conservative 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 Conservative Allocation, you can compare the effects of market volatilities on Mainstay Tax and Mainstay Conservative 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 Conservative. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Tax and Mainstay Conservative.
Diversification Opportunities for Mainstay Tax and Mainstay Conservative
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mainstay and Mainstay is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Tax Free and Mainstay Conservative Allocati in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Conservative 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 Conservative. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Conservative has no effect on the direction of Mainstay Tax i.e., Mainstay Tax and Mainstay Conservative go up and down completely randomly.
Pair Corralation between Mainstay Tax and Mainstay Conservative
Assuming the 90 days horizon Mainstay Tax Free is expected to under-perform the Mainstay Conservative. But the mutual fund apears to be less risky and, when comparing its historical volatility, Mainstay Tax Free is 2.02 times less risky than Mainstay Conservative. The mutual fund trades about -0.07 of its potential returns per unit of risk. The Mainstay Conservative Allocation is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 1,178 in Mainstay Conservative Allocation on November 3, 2024 and sell it today you would earn a total of 21.00 from holding Mainstay Conservative Allocation or generate 1.78% 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 Conservative Allocati
Performance |
| Timeline |
| Mainstay Tax Free |
| Mainstay Conservative |
Mainstay Tax and Mainstay Conservative Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay Tax and Mainstay Conservative
The main advantage of trading using opposite Mainstay Tax and Mainstay Conservative positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Tax position performs unexpectedly, Mainstay Conservative 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 Conservative will offset losses from the drop in Mainstay Conservative's long position.| Mainstay Tax vs. Upright Growth Income | Mainstay Tax vs. T Rowe Price | Mainstay Tax vs. L Abbett Growth | Mainstay Tax vs. Rational Defensive Growth |
| Mainstay Conservative vs. Mainstay High Yield | Mainstay Conservative vs. Mainstay Tax Free | Mainstay Conservative vs. Mainstay Income Builder | Mainstay Conservative 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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