Correlation Between Mainstay Large and Mainstay Moderate
Can any of the company-specific risk be diversified away by investing in both Mainstay Large and Mainstay Moderate 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 Moderate 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 Moderate Allocation, you can compare the effects of market volatilities on Mainstay Large and Mainstay Moderate 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 Moderate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Large and Mainstay Moderate.
Diversification Opportunities for Mainstay Large and Mainstay Moderate
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mainstay and Mainstay is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Large Cap and Mainstay Moderate Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Moderate 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 Moderate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Moderate has no effect on the direction of Mainstay Large i.e., Mainstay Large and Mainstay Moderate go up and down completely randomly.
Pair Corralation between Mainstay Large and Mainstay Moderate
Assuming the 90 days horizon Mainstay Large Cap is expected to generate 2.35 times more return on investment than Mainstay Moderate. However, Mainstay Large is 2.35 times more volatile than Mainstay Moderate Allocation. It trades about 0.09 of its potential returns per unit of risk. Mainstay Moderate Allocation is currently generating about 0.09 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 | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mainstay Large Cap vs. Mainstay Moderate Allocation
Performance |
| Timeline |
| Mainstay Large Cap |
| Mainstay Moderate |
Mainstay Large and Mainstay Moderate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay Large and Mainstay Moderate
The main advantage of trading using opposite Mainstay Large and Mainstay Moderate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Large position performs unexpectedly, Mainstay Moderate 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 Moderate will offset losses from the drop in Mainstay Moderate'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 Moderate vs. Alphacentric Lifesci Healthcare | Mainstay Moderate vs. Fidelity Advisor Health | Mainstay Moderate vs. Alger Health Sciences | Mainstay Moderate vs. Deutsche Health And |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |