Correlation Between Mainstay Tax and Mainstay Moderate
Can any of the company-specific risk be diversified away by investing in both Mainstay Tax and Mainstay Moderate 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 Moderate 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 Moderate Allocation, you can compare the effects of market volatilities on Mainstay Tax and Mainstay Moderate 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 Moderate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Tax and Mainstay Moderate.
Diversification Opportunities for Mainstay Tax and Mainstay Moderate
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 Moderate Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Moderate 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 Moderate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Moderate has no effect on the direction of Mainstay Tax i.e., Mainstay Tax and Mainstay Moderate go up and down completely randomly.
Pair Corralation between Mainstay Tax and Mainstay Moderate
Assuming the 90 days horizon Mainstay Tax is expected to generate 1.81 times less return on investment than Mainstay Moderate. But when comparing it to its historical volatility, Mainstay Tax Free is 1.66 times less risky than Mainstay Moderate. It trades about 0.21 of its potential returns per unit of risk. Mainstay Moderate Allocation is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 1,418 in Mainstay Moderate Allocation on August 31, 2024 and sell it today you would earn a total of 36.00 from holding Mainstay Moderate Allocation or generate 2.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mainstay Tax Free vs. Mainstay Moderate Allocation
Performance |
| Timeline |
| Mainstay Tax Free |
| Mainstay Moderate |
Mainstay Tax and Mainstay Moderate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay Tax and Mainstay Moderate
The main advantage of trading using opposite Mainstay Tax and Mainstay Moderate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Tax position performs unexpectedly, Mainstay Moderate 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 Moderate will offset losses from the drop in Mainstay Moderate's long position.| Mainstay Tax vs. Victory Rs Small | Mainstay Tax vs. Champlain Small | Mainstay Tax vs. Fisher Small Cap | Mainstay Tax vs. Chartwell Small Cap |
| Mainstay Moderate vs. Technology Ultrasector Profund | Mainstay Moderate vs. Dreyfus Technology Growth | Mainstay Moderate vs. Fidelity Advisor Technology | Mainstay Moderate vs. Pgim Jennison Technology |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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