Correlation Between Mainstay Large and Mainstay Unconstrained
Can any of the company-specific risk be diversified away by investing in both Mainstay Large and Mainstay Unconstrained 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 Unconstrained 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 Unconstrained Bond, you can compare the effects of market volatilities on Mainstay Large and Mainstay Unconstrained 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 Unconstrained. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Large and Mainstay Unconstrained.
Diversification Opportunities for Mainstay Large and Mainstay Unconstrained
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mainstay and Mainstay is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Large Cap and Mainstay Unconstrained Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Unconstrained 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 Unconstrained. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Unconstrained has no effect on the direction of Mainstay Large i.e., Mainstay Large and Mainstay Unconstrained go up and down completely randomly.
Pair Corralation between Mainstay Large and Mainstay Unconstrained
Assuming the 90 days horizon Mainstay Large Cap is expected to generate 4.5 times more return on investment than Mainstay Unconstrained. However, Mainstay Large is 4.5 times more volatile than Mainstay Unconstrained Bond. It trades about 0.14 of its potential returns per unit of risk. Mainstay Unconstrained Bond is currently generating about -0.03 per unit of risk. If you would invest 906.00 in Mainstay Large Cap on August 28, 2024 and sell it today you would earn a total of 92.00 from holding Mainstay Large Cap or generate 10.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mainstay Large Cap vs. Mainstay Unconstrained Bond
Performance |
| Timeline |
| Mainstay Large Cap |
| Mainstay Unconstrained |
Mainstay Large and Mainstay Unconstrained Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay Large and Mainstay Unconstrained
The main advantage of trading using opposite Mainstay Large and Mainstay Unconstrained positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Large position performs unexpectedly, Mainstay Unconstrained 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 Unconstrained will offset losses from the drop in Mainstay Unconstrained's long position.| Mainstay Large vs. Dreyfus Natural Resources | Mainstay Large vs. Jennison Natural Resources | Mainstay Large vs. Franklin Natural Resources | Mainstay Large vs. Franklin Natural Resources |
| Mainstay Unconstrained vs. Mainstay Large Cap | Mainstay Unconstrained vs. Mainstay Large Cap | Mainstay Unconstrained vs. Mainstay Large Cap | Mainstay Unconstrained vs. Mainstay Moderate Allocation |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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