Correlation Between Mainstay Definedterm and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Mainstay Definedterm and Dow Jones 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 Definedterm and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mainstay Definedterm Muncipal and Dow Jones Industrial, you can compare the effects of market volatilities on Mainstay Definedterm and Dow Jones 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 Definedterm with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Definedterm and Dow Jones.
Diversification Opportunities for Mainstay Definedterm and Dow Jones
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mainstay and Dow is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Definedterm Muncipal and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Mainstay Definedterm 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 Definedterm Muncipal are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Mainstay Definedterm i.e., Mainstay Definedterm and Dow Jones go up and down completely randomly.
Pair Corralation between Mainstay Definedterm and Dow Jones
Considering the 90-day investment horizon Mainstay Definedterm Muncipal is expected to under-perform the Dow Jones. But the fund apears to be less risky and, when comparing its historical volatility, Mainstay Definedterm Muncipal is 1.3 times less risky than Dow Jones. The fund trades about -0.25 of its potential returns per unit of risk. The Dow Jones Industrial is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 4,237,436 in Dow Jones Industrial on August 25, 2024 and sell it today you would earn a total of 192,215 from holding Dow Jones Industrial or generate 4.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Mainstay Definedterm Muncipal vs. Dow Jones Industrial
Performance |
| Timeline |
Mainstay Definedterm and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Mainstay Definedterm Muncipal
Pair trading matchups for Mainstay Definedterm
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Mainstay Definedterm and Dow Jones
The main advantage of trading using opposite Mainstay Definedterm and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Definedterm position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Mainstay Definedterm vs. Blackrock Muniholdings Closed | Mainstay Definedterm vs. DTF Tax Free | Mainstay Definedterm vs. John Hancock Income | Mainstay Definedterm vs. MFS Investment Grade |
| Dow Jones vs. Vistra Energy Corp | Dow Jones vs. Fluence Energy | Dow Jones vs. Old Republic International | Dow Jones vs. Empresa Distribuidora y |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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