Correlation Between Mainstay High and Icon Natural
Can any of the company-specific risk be diversified away by investing in both Mainstay High and Icon Natural 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 High and Icon Natural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mainstay High Yield and Icon Natural Resources, you can compare the effects of market volatilities on Mainstay High and Icon Natural 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 High with a short position of Icon Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay High and Icon Natural.
Diversification Opportunities for Mainstay High and Icon Natural
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Mainstay and Icon is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay High Yield and Icon Natural Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icon Natural Resources and Mainstay High 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 High Yield are associated (or correlated) with Icon Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Icon Natural Resources has no effect on the direction of Mainstay High i.e., Mainstay High and Icon Natural go up and down completely randomly.
Pair Corralation between Mainstay High and Icon Natural
Assuming the 90 days horizon Mainstay High is expected to generate 4.03 times less return on investment than Icon Natural. But when comparing it to its historical volatility, Mainstay High Yield is 3.92 times less risky than Icon Natural. It trades about 0.08 of its potential returns per unit of risk. Icon Natural Resources is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,635 in Icon Natural Resources on August 25, 2024 and sell it today you would earn a total of 342.00 from holding Icon Natural Resources or generate 20.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mainstay High Yield vs. Icon Natural Resources
Performance |
| Timeline |
| Mainstay High Yield |
| Icon Natural Resources |
Mainstay High and Icon Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay High and Icon Natural
The main advantage of trading using opposite Mainstay High and Icon Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay High position performs unexpectedly, Icon Natural 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 Icon Natural will offset losses from the drop in Icon Natural's long position.| Mainstay High vs. Icon Natural Resources | Mainstay High vs. Dreyfus Natural Resources | Mainstay High vs. Franklin Natural Resources | Mainstay High vs. Jennison Natural Resources |
| Icon Natural vs. Icon Financial Fund | Icon Natural vs. Dreyfus Natural Resources | Icon Natural vs. Icon Natural Resources | Icon Natural vs. Icon Information Technology |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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