Correlation Between Mainstay Moderate and Lgm Risk
Can any of the company-specific risk be diversified away by investing in both Mainstay Moderate and Lgm Risk 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 Lgm Risk 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 Lgm Risk Managed, you can compare the effects of market volatilities on Mainstay Moderate and Lgm Risk 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 Lgm Risk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Moderate and Lgm Risk.
Diversification Opportunities for Mainstay Moderate and Lgm Risk
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mainstay and Lgm is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Moderate Allocation and Lgm Risk Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lgm Risk Managed 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 Lgm Risk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lgm Risk Managed has no effect on the direction of Mainstay Moderate i.e., Mainstay Moderate and Lgm Risk go up and down completely randomly.
Pair Corralation between Mainstay Moderate and Lgm Risk
Assuming the 90 days horizon Mainstay Moderate Allocation is expected to generate 1.26 times more return on investment than Lgm Risk. However, Mainstay Moderate is 1.26 times more volatile than Lgm Risk Managed. It trades about 0.11 of its potential returns per unit of risk. Lgm Risk Managed is currently generating about 0.14 per unit of risk. If you would invest 1,311 in Mainstay Moderate Allocation on September 12, 2024 and sell it today you would earn a total of 180.00 from holding Mainstay Moderate Allocation or generate 13.73% 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. Lgm Risk Managed
Performance |
| Timeline |
| Mainstay Moderate |
| Lgm Risk Managed |
Mainstay Moderate and Lgm Risk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay Moderate and Lgm Risk
The main advantage of trading using opposite Mainstay Moderate and Lgm Risk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Moderate position performs unexpectedly, Lgm Risk 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 Lgm Risk will offset losses from the drop in Lgm Risk's long position.| Mainstay Moderate vs. Strategic Allocation Servative | Mainstay Moderate vs. Strategic Allocation Aggressive | Mainstay Moderate vs. Value Fund Investor | Mainstay Moderate vs. International Growth Fund |
| Lgm Risk vs. Guggenheim Diversified Income | Lgm Risk vs. Wealthbuilder Conservative Allocation | Lgm Risk vs. Jpmorgan Diversified Fund | Lgm Risk vs. Federated Hermes Conservative |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |