Correlation Between Mainstay Moderate and Fm Investments
Can any of the company-specific risk be diversified away by investing in both Mainstay Moderate and Fm Investments 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 Moderate and Fm Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mainstay Moderate Allocation and Fm Investments Large, you can compare the effects of market volatilities on Mainstay Moderate and Fm Investments 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 Moderate with a short position of Fm Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Moderate and Fm Investments.
Diversification Opportunities for Mainstay Moderate and Fm Investments
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mainstay and IAFLX is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Moderate Allocation and Fm Investments Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fm Investments Large and Mainstay Moderate 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 Moderate Allocation are associated (or correlated) with Fm Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fm Investments Large has no effect on the direction of Mainstay Moderate i.e., Mainstay Moderate and Fm Investments go up and down completely randomly.
Pair Corralation between Mainstay Moderate and Fm Investments
Assuming the 90 days horizon Mainstay Moderate is expected to generate 2.03 times less return on investment than Fm Investments. But when comparing it to its historical volatility, Mainstay Moderate Allocation is 2.67 times less risky than Fm Investments. It trades about 0.1 of its potential returns per unit of risk. Fm Investments Large is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,225 in Fm Investments Large on September 12, 2024 and sell it today you would earn a total of 725.00 from holding Fm Investments Large or generate 59.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mainstay Moderate Allocation vs. Fm Investments Large
Performance |
| Timeline |
| Mainstay Moderate |
| Fm Investments Large |
Mainstay Moderate and Fm Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay Moderate and Fm Investments
The main advantage of trading using opposite Mainstay Moderate and Fm Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Moderate position performs unexpectedly, Fm Investments 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 Fm Investments will offset losses from the drop in Fm Investments' long position.| Mainstay Moderate vs. L Abbett Growth | Mainstay Moderate vs. Tfa Alphagen Growth | Mainstay Moderate vs. Eip Growth And | Mainstay Moderate vs. Smallcap Growth Fund |
| Fm Investments vs. American Funds The | Fm Investments vs. American Funds The | Fm Investments vs. Growth Fund Of | Fm Investments vs. Growth Fund Of |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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