Correlation Between Mainstay Large and Via Renewables
Can any of the company-specific risk be diversified away by investing in both Mainstay Large and Via Renewables 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 Via Renewables 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 Via Renewables, you can compare the effects of market volatilities on Mainstay Large and Via Renewables 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 Via Renewables. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Large and Via Renewables.
Diversification Opportunities for Mainstay Large and Via Renewables
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mainstay and Via is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Large Cap and Via Renewables in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Via Renewables 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 Via Renewables. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Via Renewables has no effect on the direction of Mainstay Large i.e., Mainstay Large and Via Renewables go up and down completely randomly.
Pair Corralation between Mainstay Large and Via Renewables
Assuming the 90 days horizon Mainstay Large Cap is expected to generate 0.6 times more return on investment than Via Renewables. However, Mainstay Large Cap is 1.66 times less risky than Via Renewables. It trades about 0.1 of its potential returns per unit of risk. Via Renewables is currently generating about 0.02 per unit of risk. If you would invest 996.00 in Mainstay Large Cap on September 1, 2024 and sell it today you would earn a total of 150.00 from holding Mainstay Large Cap or generate 15.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Mainstay Large Cap vs. Via Renewables
Performance |
| Timeline |
| Mainstay Large Cap |
| Via Renewables |
Mainstay Large and Via Renewables Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay Large and Via Renewables
The main advantage of trading using opposite Mainstay Large and Via Renewables positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Large position performs unexpectedly, Via Renewables 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 Via Renewables will offset losses from the drop in Via Renewables' long position.| Mainstay Large vs. Mainstay Tax Free | Mainstay Large vs. Mainstay Large Cap | Mainstay Large vs. Mainstay Large Cap | Mainstay Large vs. Mainstay Mackay High |
| Via Renewables vs. Centrais Eltricas Brasileiras | Via Renewables vs. Nextera Energy | Via Renewables vs. Consumers Energy | Via Renewables vs. CMS Energy |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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