Correlation Between Mainstay New and Mainstay High
Can any of the company-specific risk be diversified away by investing in both Mainstay New and Mainstay High 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 New and Mainstay High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mainstay New York and Mainstay High Yield, you can compare the effects of market volatilities on Mainstay New and Mainstay High 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 New with a short position of Mainstay High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay New and Mainstay High.
Diversification Opportunities for Mainstay New and Mainstay High
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Mainstay and Mainstay is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay New York and Mainstay High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay High Yield and Mainstay New 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 New York are associated (or correlated) with Mainstay High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay High Yield has no effect on the direction of Mainstay New i.e., Mainstay New and Mainstay High go up and down completely randomly.
Pair Corralation between Mainstay New and Mainstay High
Assuming the 90 days horizon Mainstay New is expected to generate 1.34 times less return on investment than Mainstay High. But when comparing it to its historical volatility, Mainstay New York is 1.22 times less risky than Mainstay High. It trades about 0.07 of its potential returns per unit of risk. Mainstay High Yield is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,065 in Mainstay High Yield on August 25, 2024 and sell it today you would earn a total of 136.00 from holding Mainstay High Yield or generate 12.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mainstay New York vs. Mainstay High Yield
Performance |
| Timeline |
| Mainstay New York |
| Mainstay High Yield |
Mainstay New and Mainstay High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay New and Mainstay High
The main advantage of trading using opposite Mainstay New and Mainstay High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay New position performs unexpectedly, Mainstay High 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 High will offset losses from the drop in Mainstay High's long position.| Mainstay New vs. Mainstay High Yield | Mainstay New vs. Mainstay Tax Free | Mainstay New vs. Mainstay Income Builder | Mainstay New vs. Mainstay Large Cap |
| Mainstay High vs. Icon Natural Resources | Mainstay High vs. Dreyfus Natural Resources | Mainstay High vs. Franklin Natural Resources | Mainstay High vs. Jennison Natural Resources |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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