Correlation Between Mainstay High and Mainstay Mackay
Can any of the company-specific risk be diversified away by investing in both Mainstay High and Mainstay Mackay 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 Mackay 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 Mackay New, you can compare the effects of market volatilities on Mainstay High and Mainstay Mackay 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 Mackay. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay High and Mainstay Mackay.
Diversification Opportunities for Mainstay High and Mainstay Mackay
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mainstay and Mainstay is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay High Yield and Mainstay Mackay New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Mackay New 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 Mackay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Mackay New has no effect on the direction of Mainstay High i.e., Mainstay High and Mainstay Mackay go up and down completely randomly.
Pair Corralation between Mainstay High and Mainstay Mackay
Assuming the 90 days horizon Mainstay High Yield is expected to generate 1.08 times more return on investment than Mainstay Mackay. However, Mainstay High is 1.08 times more volatile than Mainstay Mackay New. It trades about 0.21 of its potential returns per unit of risk. Mainstay Mackay New is currently generating about 0.21 per unit of risk. If you would invest 1,187 in Mainstay High Yield on August 30, 2024 and sell it today you would earn a total of 21.00 from holding Mainstay High Yield or generate 1.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mainstay High Yield vs. Mainstay Mackay New
Performance |
| Timeline |
| Mainstay High Yield |
| Mainstay Mackay New |
Mainstay High and Mainstay Mackay Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay High and Mainstay Mackay
The main advantage of trading using opposite Mainstay High and Mainstay Mackay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay High position performs unexpectedly, Mainstay Mackay 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 Mackay will offset losses from the drop in Mainstay Mackay's long position.| Mainstay High vs. California Bond Fund | Mainstay High vs. Maryland Tax Free Bond | Mainstay High vs. Oklahoma Municipal Fund | Mainstay High vs. Ambrus Core Bond |
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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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