Correlation Between Mainstay Moderate and Mainstay Tax
Can any of the company-specific risk be diversified away by investing in both Mainstay Moderate and Mainstay Tax 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 Tax 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 Tax Free, you can compare the effects of market volatilities on Mainstay Moderate and Mainstay Tax 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 Tax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Moderate and Mainstay Tax.
Diversification Opportunities for Mainstay Moderate and Mainstay Tax
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Mainstay and Mainstay is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Moderate Allocation and Mainstay Tax Free in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Tax Free 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 Tax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Tax Free has no effect on the direction of Mainstay Moderate i.e., Mainstay Moderate and Mainstay Tax go up and down completely randomly.
Pair Corralation between Mainstay Moderate and Mainstay Tax
Assuming the 90 days horizon Mainstay Moderate Allocation is expected to generate 1.53 times more return on investment than Mainstay Tax. However, Mainstay Moderate is 1.53 times more volatile than Mainstay Tax Free. It trades about 0.19 of its potential returns per unit of risk. Mainstay Tax Free is currently generating about 0.09 per unit of risk. If you would invest 1,450 in Mainstay Moderate Allocation on August 26, 2024 and sell it today you would earn a total of 29.00 from holding Mainstay Moderate Allocation or generate 2.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mainstay Moderate Allocation vs. Mainstay Tax Free
Performance |
| Timeline |
| Mainstay Moderate |
| Mainstay Tax Free |
Mainstay Moderate and Mainstay Tax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay Moderate and Mainstay Tax
The main advantage of trading using opposite Mainstay Moderate and Mainstay Tax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Moderate position performs unexpectedly, Mainstay Tax 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 Tax will offset losses from the drop in Mainstay Tax's long position.| Mainstay Moderate vs. Mainstay Tax Free | Mainstay Moderate vs. Mainstay Large Cap | Mainstay Moderate vs. Mainstay Large Cap | Mainstay Moderate vs. Mainstay Large Cap |
| Mainstay Tax vs. Mainstay Large Cap | Mainstay Tax vs. Mainstay Large Cap | Mainstay Tax vs. Mainstay Large Cap | Mainstay Tax vs. Mainstay Large Cap |
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.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |