Correlation Between Mainstay Income and Mainstay Nerstone
Can any of the company-specific risk be diversified away by investing in both Mainstay Income and Mainstay Nerstone 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 Income and Mainstay Nerstone into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mainstay Income Builder and Mainstay Nerstone Growth, you can compare the effects of market volatilities on Mainstay Income and Mainstay Nerstone 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 Income with a short position of Mainstay Nerstone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Income and Mainstay Nerstone.
Diversification Opportunities for Mainstay Income and Mainstay Nerstone
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mainstay and Mainstay is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Income Builder and Mainstay Nerstone Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Nerstone Growth and Mainstay Income 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 Income Builder are associated (or correlated) with Mainstay Nerstone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Nerstone Growth has no effect on the direction of Mainstay Income i.e., Mainstay Income and Mainstay Nerstone go up and down completely randomly.
Pair Corralation between Mainstay Income and Mainstay Nerstone
Assuming the 90 days horizon Mainstay Income is expected to generate 3.08 times less return on investment than Mainstay Nerstone. But when comparing it to its historical volatility, Mainstay Income Builder is 2.4 times less risky than Mainstay Nerstone. It trades about 0.05 of its potential returns per unit of risk. Mainstay Nerstone Growth is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 4,934 in Mainstay Nerstone Growth on August 27, 2024 and sell it today you would earn a total of 77.00 from holding Mainstay Nerstone Growth or generate 1.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mainstay Income Builder vs. Mainstay Nerstone Growth
Performance |
| Timeline |
| Mainstay Income Builder |
| Mainstay Nerstone Growth |
Mainstay Income and Mainstay Nerstone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay Income and Mainstay Nerstone
The main advantage of trading using opposite Mainstay Income and Mainstay Nerstone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Income position performs unexpectedly, Mainstay Nerstone 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 Nerstone will offset losses from the drop in Mainstay Nerstone's long position.| Mainstay Income vs. Hartford Healthcare Hls | Mainstay Income vs. Deutsche Health And | Mainstay Income vs. Delaware Healthcare Fund | Mainstay Income vs. Allianzgi Health Sciences |
| Mainstay Nerstone vs. Mainstay High Yield | Mainstay Nerstone vs. Mainstay Tax Free | Mainstay Nerstone vs. Mainstay Income Builder | Mainstay Nerstone 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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