Correlation Between Mainstay High and Maryland Tax
Can any of the company-specific risk be diversified away by investing in both Mainstay High and Maryland Tax 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 Maryland Tax 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 Maryland Tax Free Bond, you can compare the effects of market volatilities on Mainstay High and Maryland Tax 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 Maryland Tax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay High and Maryland Tax.
Diversification Opportunities for Mainstay High and Maryland Tax
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Mainstay and Maryland is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay High Yield and Maryland Tax Free Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maryland Tax Free 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 Maryland Tax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maryland Tax Free has no effect on the direction of Mainstay High i.e., Mainstay High and Maryland Tax go up and down completely randomly.
Pair Corralation between Mainstay High and Maryland Tax
Assuming the 90 days horizon Mainstay High Yield is expected to generate 1.22 times more return on investment than Maryland Tax. However, Mainstay High is 1.22 times more volatile than Maryland Tax Free Bond. It trades about 0.15 of its potential returns per unit of risk. Maryland Tax Free Bond is currently generating about 0.12 per unit of risk. If you would invest 1,184 in Mainstay High Yield on November 27, 2024 and sell it today you would earn a total of 9.00 from holding Mainstay High Yield or generate 0.76% 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. Maryland Tax Free Bond
Performance |
| Timeline |
| Mainstay High Yield |
| Maryland Tax Free |
Mainstay High and Maryland Tax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay High and Maryland Tax
The main advantage of trading using opposite Mainstay High and Maryland Tax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay High position performs unexpectedly, Maryland Tax 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 Maryland Tax will offset losses from the drop in Maryland Tax's long position.| Mainstay High vs. Us Government Securities | Mainstay High vs. Aig Government Money | Mainstay High vs. Vanguard Intermediate Term Government | Mainstay High vs. Dreyfus Government Cash |
| Maryland Tax vs. Blackrock Global Longshort | Maryland Tax vs. Barings Active Short | Maryland Tax vs. Transam Short Term Bond | Maryland Tax vs. Alpine Ultra Short |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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