Correlation Between Mainstay Large and Mainstay Short
Can any of the company-specific risk be diversified away by investing in both Mainstay Large and Mainstay Short 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 Short 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 Short Duration, you can compare the effects of market volatilities on Mainstay Large and Mainstay Short 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 Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Large and Mainstay Short.
Diversification Opportunities for Mainstay Large and Mainstay Short
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Mainstay and MAINSTAY is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Large Cap and Mainstay Short Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Short Duration 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 Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Short Duration has no effect on the direction of Mainstay Large i.e., Mainstay Large and Mainstay Short go up and down completely randomly.
Pair Corralation between Mainstay Large and Mainstay Short
Assuming the 90 days horizon Mainstay Large Cap is expected to generate 8.3 times more return on investment than Mainstay Short. However, Mainstay Large is 8.3 times more volatile than Mainstay Short Duration. It trades about 0.09 of its potential returns per unit of risk. Mainstay Short Duration is currently generating about 0.22 per unit of risk. If you would invest 862.00 in Mainstay Large Cap on August 30, 2024 and sell it today you would earn a total of 561.00 from holding Mainstay Large Cap or generate 65.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mainstay Large Cap vs. Mainstay Short Duration
Performance |
| Timeline |
| Mainstay Large Cap |
| Mainstay Short Duration |
Mainstay Large and Mainstay Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay Large and Mainstay Short
The main advantage of trading using opposite Mainstay Large and Mainstay Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Large position performs unexpectedly, Mainstay Short 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 Short will offset losses from the drop in Mainstay Short's long position.| Mainstay Large vs. Pace Large Growth | Mainstay Large vs. Aqr Large Cap | Mainstay Large vs. Goldman Sachs Large | Mainstay Large vs. T Rowe Price |
| Mainstay Short vs. Royce Global Financial | Mainstay Short vs. First Trust Specialty | Mainstay Short vs. Blackrock Financial Institutions | Mainstay Short vs. Pimco Capital Sec |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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