Correlation Between Mainstay High and Mainstay New
Can any of the company-specific risk be diversified away by investing in both Mainstay High and Mainstay New 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 Mainstay New 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 Mainstay New York, you can compare the effects of market volatilities on Mainstay High and Mainstay New 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 Mainstay New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay High and Mainstay New.
Diversification Opportunities for Mainstay High and Mainstay New
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Mainstay and Mainstay is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay High Yield and Mainstay New York in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay New York 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 Mainstay New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay New York has no effect on the direction of Mainstay High i.e., Mainstay High and Mainstay New go up and down completely randomly.
Pair Corralation between Mainstay High and Mainstay New
Assuming the 90 days horizon Mainstay High is expected to generate 1.06 times less return on investment than Mainstay New. In addition to that, Mainstay High is 1.12 times more volatile than Mainstay New York. It trades about 0.12 of its total potential returns per unit of risk. Mainstay New York is currently generating about 0.15 per unit of volatility. If you would invest 957.00 in Mainstay New York on August 25, 2024 and sell it today you would earn a total of 12.00 from holding Mainstay New York or generate 1.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mainstay High Yield vs. Mainstay New York
Performance |
| Timeline |
| Mainstay High Yield |
| Mainstay New York |
Mainstay High and Mainstay New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay High and Mainstay New
The main advantage of trading using opposite Mainstay High and Mainstay New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay High position performs unexpectedly, Mainstay New 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 New will offset losses from the drop in Mainstay New'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 |
| Mainstay New vs. Mainstay High Yield | Mainstay New vs. Mainstay Tax Free | Mainstay New vs. Mainstay Income Builder | Mainstay New vs. Mainstay Large Cap |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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