Correlation Between Mainstay Large and Morningstar Municipal
Can any of the company-specific risk be diversified away by investing in both Mainstay Large and Morningstar Municipal 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 Morningstar Municipal 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 Morningstar Municipal Bond, you can compare the effects of market volatilities on Mainstay Large and Morningstar Municipal 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 Morningstar Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Large and Morningstar Municipal.
Diversification Opportunities for Mainstay Large and Morningstar Municipal
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mainstay and Morningstar is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Large Cap and Morningstar Municipal Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Morningstar Municipal 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 Morningstar Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Morningstar Municipal has no effect on the direction of Mainstay Large i.e., Mainstay Large and Morningstar Municipal go up and down completely randomly.
Pair Corralation between Mainstay Large and Morningstar Municipal
Assuming the 90 days horizon Mainstay Large Cap is expected to under-perform the Morningstar Municipal. In addition to that, Mainstay Large is 6.24 times more volatile than Morningstar Municipal Bond. It trades about -0.01 of its total potential returns per unit of risk. Morningstar Municipal Bond is currently generating about 0.16 per unit of volatility. If you would invest 990.00 in Morningstar Municipal Bond on November 28, 2024 and sell it today you would earn a total of 11.00 from holding Morningstar Municipal Bond or generate 1.11% 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. Morningstar Municipal Bond
Performance |
| Timeline |
| Mainstay Large Cap |
| Morningstar Municipal |
Mainstay Large and Morningstar Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay Large and Morningstar Municipal
The main advantage of trading using opposite Mainstay Large and Morningstar Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Large position performs unexpectedly, Morningstar Municipal 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 Morningstar Municipal will offset losses from the drop in Morningstar Municipal's long position.| Mainstay Large vs. Intermediate Term Bond Fund | Mainstay Large vs. Multisector Bond Sma | Mainstay Large vs. Versatile Bond Portfolio | Mainstay Large vs. Old Westbury Municipal |
| Morningstar Municipal vs. Franklin Small Cap | Morningstar Municipal vs. Glg Intl Small | Morningstar Municipal vs. United Kingdom Small | Morningstar Municipal vs. Small Pany Growth |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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