Correlation Between Mainstay Moderate and Alphacentric Lifesci
Can any of the company-specific risk be diversified away by investing in both Mainstay Moderate and Alphacentric Lifesci 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 Alphacentric Lifesci 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 Alphacentric Lifesci Healthcare, you can compare the effects of market volatilities on Mainstay Moderate and Alphacentric Lifesci 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 Alphacentric Lifesci. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Moderate and Alphacentric Lifesci.
Diversification Opportunities for Mainstay Moderate and Alphacentric Lifesci
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mainstay and Alphacentric is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Moderate Allocation and Alphacentric Lifesci Healthcar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alphacentric Lifesci 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 Alphacentric Lifesci. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alphacentric Lifesci has no effect on the direction of Mainstay Moderate i.e., Mainstay Moderate and Alphacentric Lifesci go up and down completely randomly.
Pair Corralation between Mainstay Moderate and Alphacentric Lifesci
Assuming the 90 days horizon Mainstay Moderate Allocation is expected to generate 0.73 times more return on investment than Alphacentric Lifesci. However, Mainstay Moderate Allocation is 1.36 times less risky than Alphacentric Lifesci. It trades about -0.02 of its potential returns per unit of risk. Alphacentric Lifesci Healthcare is currently generating about -0.05 per unit of risk. If you would invest 1,399 in Mainstay Moderate Allocation on November 28, 2024 and sell it today you would lose (27.00) from holding Mainstay Moderate Allocation or give up 1.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mainstay Moderate Allocation vs. Alphacentric Lifesci Healthcar
Performance |
| Timeline |
| Mainstay Moderate |
| Alphacentric Lifesci |
Mainstay Moderate and Alphacentric Lifesci Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay Moderate and Alphacentric Lifesci
The main advantage of trading using opposite Mainstay Moderate and Alphacentric Lifesci positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Moderate position performs unexpectedly, Alphacentric Lifesci 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 Alphacentric Lifesci will offset losses from the drop in Alphacentric Lifesci's long position.| Mainstay Moderate vs. Touchstone Small Cap | Mainstay Moderate vs. Franklin Small Cap | Mainstay Moderate vs. Champlain Small | Mainstay Moderate vs. Transamerica International Small |
| Alphacentric Lifesci vs. Ab Bond Inflation | Alphacentric Lifesci vs. Ab Bond Inflation | Alphacentric Lifesci vs. Old Westbury Municipal | Alphacentric Lifesci vs. Nuveen Strategic Municipal |
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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