Correlation Between Mainstay Large and Mainstay Conservative
Can any of the company-specific risk be diversified away by investing in both Mainstay Large 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 Large 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 Large Cap and Mainstay Conservative Allocation, you can compare the effects of market volatilities on Mainstay Large 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 Large with a short position of Mainstay Conservative. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Large and Mainstay Conservative.
Diversification Opportunities for Mainstay Large and Mainstay Conservative
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mainstay and Mainstay is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Large Cap 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 Large 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 Large Cap 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 Large i.e., Mainstay Large and Mainstay Conservative go up and down completely randomly.
Pair Corralation between Mainstay Large and Mainstay Conservative
Assuming the 90 days horizon Mainstay Large Cap is expected to generate 3.01 times more return on investment than Mainstay Conservative. However, Mainstay Large is 3.01 times more volatile than Mainstay Conservative Allocation. It trades about 0.12 of its potential returns per unit of risk. Mainstay Conservative Allocation is currently generating about 0.2 per unit of risk. If you would invest 429.00 in Mainstay Large Cap on November 3, 2024 and sell it today you would earn a total of 14.00 from holding Mainstay Large Cap or generate 3.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mainstay Large Cap vs. Mainstay Conservative Allocati
Performance |
| Timeline |
| Mainstay Large Cap |
| Mainstay Conservative |
Mainstay Large and Mainstay Conservative Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay Large and Mainstay Conservative
The main advantage of trading using opposite Mainstay Large and Mainstay Conservative positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Large 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 Large vs. Federated Government Income | Mainstay Large vs. Gamco Global Telecommunications | Mainstay Large vs. Legg Mason Partners | Mainstay Large vs. Goldman Sachs Short |
| 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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