Correlation Between Mainstay High and Mainstay California
Can any of the company-specific risk be diversified away by investing in both Mainstay High and Mainstay California 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 California 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 California Tax, you can compare the effects of market volatilities on Mainstay High and Mainstay California 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 California. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay High and Mainstay California.
Diversification Opportunities for Mainstay High and Mainstay California
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Mainstay and Mainstay is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay High Yield and Mainstay California Tax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay California Tax 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 California. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay California Tax has no effect on the direction of Mainstay High i.e., Mainstay High and Mainstay California go up and down completely randomly.
Pair Corralation between Mainstay High and Mainstay California
Assuming the 90 days horizon Mainstay High Yield is expected to generate 1.28 times more return on investment than Mainstay California. However, Mainstay High is 1.28 times more volatile than Mainstay California Tax. It trades about 0.15 of its potential returns per unit of risk. Mainstay California Tax is currently generating about 0.14 per unit of risk. If you would invest 1,033 in Mainstay High Yield on November 28, 2024 and sell it today you would earn a total of 163.00 from holding Mainstay High Yield or generate 15.78% 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 California Tax
Performance |
| Timeline |
| Mainstay High Yield |
| Mainstay California Tax |
Mainstay High and Mainstay California Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay High and Mainstay California
The main advantage of trading using opposite Mainstay High and Mainstay California positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay High position performs unexpectedly, Mainstay California 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 California will offset losses from the drop in Mainstay California's long position.| Mainstay High vs. Prudential Real Estate | Mainstay High vs. Real Estate Ultrasector | Mainstay High vs. Fidelity Real Estate | Mainstay High vs. Vy Clarion Real |
| Mainstay California vs. Calvert Moderate Allocation | Mainstay California vs. Enhanced Large Pany | Mainstay California vs. Guidemark Large Cap | Mainstay California vs. Knights Of Umbus |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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