Correlation Between Mainstay Large and Prudential High
Can any of the company-specific risk be diversified away by investing in both Mainstay Large and Prudential High 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 Prudential High 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 Prudential High Yield, you can compare the effects of market volatilities on Mainstay Large and Prudential High 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 Prudential High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Large and Prudential High.
Diversification Opportunities for Mainstay Large and Prudential High
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mainstay and Prudential is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Large Cap and Prudential High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential High Yield 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 Prudential High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential High Yield has no effect on the direction of Mainstay Large i.e., Mainstay Large and Prudential High go up and down completely randomly.
Pair Corralation between Mainstay Large and Prudential High
Assuming the 90 days horizon Mainstay Large Cap is expected to under-perform the Prudential High. In addition to that, Mainstay Large is 5.02 times more volatile than Prudential High Yield. It trades about -0.01 of its total potential returns per unit of risk. Prudential High Yield is currently generating about 0.31 per unit of volatility. If you would invest 474.00 in Prudential High Yield on October 22, 2024 and sell it today you would earn a total of 6.00 from holding Prudential High Yield or generate 1.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mainstay Large Cap vs. Prudential High Yield
Performance |
| Timeline |
| Mainstay Large Cap |
| Prudential High Yield |
Mainstay Large and Prudential High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay Large and Prudential High
The main advantage of trading using opposite Mainstay Large and Prudential High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Large position performs unexpectedly, Prudential High 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 Prudential High will offset losses from the drop in Prudential High's long position.| Mainstay Large vs. Ab Small Cap | Mainstay Large vs. Alternative Asset Allocation | Mainstay Large vs. Qs Large Cap | Mainstay Large vs. Commodities Strategy Fund |
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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