Correlation Between Mainstay Conservative and Mainstay Moderate
Can any of the company-specific risk be diversified away by investing in both Mainstay Conservative and Mainstay Moderate 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 Conservative and Mainstay Moderate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mainstay Conservative Etf and Mainstay Moderate Etf, you can compare the effects of market volatilities on Mainstay Conservative and Mainstay Moderate 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 Conservative with a short position of Mainstay Moderate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Conservative and Mainstay Moderate.
Diversification Opportunities for Mainstay Conservative and Mainstay Moderate
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Mainstay and Mainstay is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Conservative Etf and Mainstay Moderate Etf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Moderate Etf and Mainstay Conservative 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 Conservative Etf are associated (or correlated) with Mainstay Moderate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Moderate Etf has no effect on the direction of Mainstay Conservative i.e., Mainstay Conservative and Mainstay Moderate go up and down completely randomly.
Pair Corralation between Mainstay Conservative and Mainstay Moderate
Assuming the 90 days horizon Mainstay Conservative is expected to generate 1.39 times less return on investment than Mainstay Moderate. But when comparing it to its historical volatility, Mainstay Conservative Etf is 1.29 times less risky than Mainstay Moderate. It trades about 0.12 of its potential returns per unit of risk. Mainstay Moderate Etf is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,296 in Mainstay Moderate Etf on August 27, 2024 and sell it today you would earn a total of 18.00 from holding Mainstay Moderate Etf or generate 1.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mainstay Conservative Etf vs. Mainstay Moderate Etf
Performance |
| Timeline |
| Mainstay Conservative Etf |
| Mainstay Moderate Etf |
Mainstay Conservative and Mainstay Moderate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay Conservative and Mainstay Moderate
The main advantage of trading using opposite Mainstay Conservative and Mainstay Moderate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Conservative position performs unexpectedly, Mainstay Moderate 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 Moderate will offset losses from the drop in Mainstay Moderate's long position.| Mainstay Conservative vs. Mainstay High Yield | Mainstay Conservative vs. Mainstay Tax Free | Mainstay Conservative vs. Mainstay Income Builder | Mainstay Conservative 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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