Correlation Between Mainstay Conservative and Mainstay Short
Can any of the company-specific risk be diversified away by investing in both Mainstay Conservative and Mainstay Short 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 Short 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 Short Duration, you can compare the effects of market volatilities on Mainstay Conservative and Mainstay Short 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 Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Conservative and Mainstay Short.
Diversification Opportunities for Mainstay Conservative and Mainstay Short
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mainstay and Mainstay is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Conservative Etf and Mainstay Short Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Short Duration 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 Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Short Duration has no effect on the direction of Mainstay Conservative i.e., Mainstay Conservative and Mainstay Short go up and down completely randomly.
Pair Corralation between Mainstay Conservative and Mainstay Short
Assuming the 90 days horizon Mainstay Conservative Etf is expected to generate 4.08 times more return on investment than Mainstay Short. However, Mainstay Conservative is 4.08 times more volatile than Mainstay Short Duration. It trades about 0.09 of its potential returns per unit of risk. Mainstay Short Duration is currently generating about 0.23 per unit of risk. If you would invest 1,031 in Mainstay Conservative Etf on August 29, 2024 and sell it today you would earn a total of 89.00 from holding Mainstay Conservative Etf or generate 8.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mainstay Conservative Etf vs. Mainstay Short Duration
Performance |
| Timeline |
| Mainstay Conservative Etf |
| Mainstay Short Duration |
Mainstay Conservative and Mainstay Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay Conservative and Mainstay Short
The main advantage of trading using opposite Mainstay Conservative and Mainstay Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Conservative position performs unexpectedly, Mainstay Short 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 Short will offset losses from the drop in Mainstay Short's long position.The idea behind Mainstay Conservative Etf and Mainstay Short Duration pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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