Correlation Between Mainstay Large and Government Securities
Can any of the company-specific risk be diversified away by investing in both Mainstay Large and Government Securities 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 Government Securities 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 Government Securities Fund, you can compare the effects of market volatilities on Mainstay Large and Government Securities 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 Government Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Large and Government Securities.
Diversification Opportunities for Mainstay Large and Government Securities
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mainstay and Government is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Large Cap and Government Securities Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Government Securities 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 Government Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Government Securities has no effect on the direction of Mainstay Large i.e., Mainstay Large and Government Securities go up and down completely randomly.
Pair Corralation between Mainstay Large and Government Securities
Assuming the 90 days horizon Mainstay Large Cap is expected to generate 5.11 times more return on investment than Government Securities. However, Mainstay Large is 5.11 times more volatile than Government Securities Fund. It trades about 0.02 of its potential returns per unit of risk. Government Securities Fund is currently generating about 0.04 per unit of risk. If you would invest 750.00 in Mainstay Large Cap on September 12, 2024 and sell it today you would earn a total of 48.00 from holding Mainstay Large Cap or generate 6.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Mainstay Large Cap vs. Government Securities Fund
Performance |
| Timeline |
| Mainstay Large Cap |
| Government Securities |
Mainstay Large and Government Securities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay Large and Government Securities
The main advantage of trading using opposite Mainstay Large and Government Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Large position performs unexpectedly, Government Securities 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 Government Securities will offset losses from the drop in Government Securities' long position.| Mainstay Large vs. Palm Valley Capital | Mainstay Large vs. Lsv Small Cap | Mainstay Large vs. Queens Road Small | Mainstay Large vs. Victory Rs Partners |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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