Correlation Between Mainstay Moderate and Mainstay Convertible
Can any of the company-specific risk be diversified away by investing in both Mainstay Moderate and Mainstay Convertible 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 Mainstay Convertible 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 Mainstay Vertible Fund, you can compare the effects of market volatilities on Mainstay Moderate and Mainstay Convertible 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 Mainstay Convertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Moderate and Mainstay Convertible.
Diversification Opportunities for Mainstay Moderate and Mainstay Convertible
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 Moderate Allocation and Mainstay Vertible Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Convertible 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 Mainstay Convertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Convertible has no effect on the direction of Mainstay Moderate i.e., Mainstay Moderate and Mainstay Convertible go up and down completely randomly.
Pair Corralation between Mainstay Moderate and Mainstay Convertible
Assuming the 90 days horizon Mainstay Moderate is expected to generate 1.03 times less return on investment than Mainstay Convertible. In addition to that, Mainstay Moderate is 1.03 times more volatile than Mainstay Vertible Fund. It trades about 0.39 of its total potential returns per unit of risk. Mainstay Vertible Fund is currently generating about 0.41 per unit of volatility. If you would invest 1,877 in Mainstay Vertible Fund on September 3, 2024 and sell it today you would earn a total of 70.00 from holding Mainstay Vertible Fund or generate 3.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mainstay Moderate Allocation vs. Mainstay Vertible Fund
Performance |
| Timeline |
| Mainstay Moderate |
| Mainstay Convertible |
Mainstay Moderate and Mainstay Convertible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay Moderate and Mainstay Convertible
The main advantage of trading using opposite Mainstay Moderate and Mainstay Convertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Moderate position performs unexpectedly, Mainstay Convertible 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 Convertible will offset losses from the drop in Mainstay Convertible's long position.| Mainstay Moderate vs. Ab Global Risk | Mainstay Moderate vs. Ab High Income | Mainstay Moderate vs. Lgm Risk Managed | Mainstay Moderate vs. Guggenheim High Yield |
| Mainstay Convertible vs. Franklin Vertible Securities | Mainstay Convertible vs. Franklin Vertible Securities | Mainstay Convertible vs. Allianzgi Vertible Fund | Mainstay Convertible vs. Virtus Convertible |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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