Correlation Between Mainstay Moderate and Mainstay Balanced
Can any of the company-specific risk be diversified away by investing in both Mainstay Moderate and Mainstay Balanced 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 Balanced 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 Balanced Fund, you can compare the effects of market volatilities on Mainstay Moderate and Mainstay Balanced 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 Balanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Moderate and Mainstay Balanced.
Diversification Opportunities for Mainstay Moderate and Mainstay Balanced
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mainstay and Mainstay is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Moderate Allocation and Mainstay Balanced Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Balanced 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 Balanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Balanced has no effect on the direction of Mainstay Moderate i.e., Mainstay Moderate and Mainstay Balanced go up and down completely randomly.
Pair Corralation between Mainstay Moderate and Mainstay Balanced
Assuming the 90 days horizon Mainstay Moderate Allocation is expected to generate 0.97 times more return on investment than Mainstay Balanced. However, Mainstay Moderate Allocation is 1.03 times less risky than Mainstay Balanced. It trades about 0.22 of its potential returns per unit of risk. Mainstay Balanced Fund is currently generating about 0.2 per unit of risk. If you would invest 1,466 in Mainstay Moderate Allocation on August 29, 2024 and sell it today you would earn a total of 36.00 from holding Mainstay Moderate Allocation or generate 2.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Mainstay Moderate Allocation vs. Mainstay Balanced Fund
Performance |
| Timeline |
| Mainstay Moderate |
| Mainstay Balanced |
Mainstay Moderate and Mainstay Balanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay Moderate and Mainstay Balanced
The main advantage of trading using opposite Mainstay Moderate and Mainstay Balanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Moderate position performs unexpectedly, Mainstay Balanced 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 Balanced will offset losses from the drop in Mainstay Balanced's long position.| Mainstay Moderate vs. The Hartford Small | Mainstay Moderate vs. Champlain Small | Mainstay Moderate vs. Chartwell Small Cap | Mainstay Moderate vs. Baird Smallmid Cap |
| Mainstay Balanced vs. Baird Smallmid Cap | Mainstay Balanced vs. Gmo Small Cap | Mainstay Balanced vs. The Hartford Small | Mainstay Balanced vs. Ab Small 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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