Correlation Between Mainstay Large and Mainstay Total
Can any of the company-specific risk be diversified away by investing in both Mainstay Large and Mainstay Total 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 Total 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 Total Return, you can compare the effects of market volatilities on Mainstay Large and Mainstay Total 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 Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Large and Mainstay Total.
Diversification Opportunities for Mainstay Large and Mainstay Total
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mainstay and Mainstay is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Large Cap and Mainstay Total Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Total Return 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 Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Total Return has no effect on the direction of Mainstay Large i.e., Mainstay Large and Mainstay Total go up and down completely randomly.
Pair Corralation between Mainstay Large and Mainstay Total
Assuming the 90 days horizon Mainstay Large Cap is expected to generate 3.19 times more return on investment than Mainstay Total. However, Mainstay Large is 3.19 times more volatile than Mainstay Total Return. It trades about 0.15 of its potential returns per unit of risk. Mainstay Total Return is currently generating about 0.1 per unit of risk. If you would invest 1,275 in Mainstay Large Cap on August 31, 2024 and sell it today you would earn a total of 50.00 from holding Mainstay Large Cap or generate 3.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Mainstay Large Cap vs. Mainstay Total Return
Performance |
| Timeline |
| Mainstay Large Cap |
| Mainstay Total Return |
Mainstay Large and Mainstay Total Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay Large and Mainstay Total
The main advantage of trading using opposite Mainstay Large and Mainstay Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Large position performs unexpectedly, Mainstay Total 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 Total will offset losses from the drop in Mainstay Total's long position.| Mainstay Large vs. Ultra Short Fixed Income | Mainstay Large vs. Quantitative Longshort Equity | Mainstay Large vs. Chartwell Short Duration | Mainstay Large vs. Barings Active Short |
| Mainstay Total vs. Transamerica Financial Life | Mainstay Total vs. Davis Financial Fund | Mainstay Total vs. Royce Global Financial | Mainstay Total vs. John Hancock Financial |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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