Correlation Between Mainstay Mackay and Davis Financial
Can any of the company-specific risk be diversified away by investing in both Mainstay Mackay and Davis Financial 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 Mackay and Davis Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mainstay Mackay New and Davis Financial Fund, you can compare the effects of market volatilities on Mainstay Mackay and Davis Financial 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 Mackay with a short position of Davis Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Mackay and Davis Financial.
Diversification Opportunities for Mainstay Mackay and Davis Financial
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Mainstay and Davis is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Mackay New and Davis Financial Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Davis Financial and Mainstay Mackay 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 Mackay New are associated (or correlated) with Davis Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Davis Financial has no effect on the direction of Mainstay Mackay i.e., Mainstay Mackay and Davis Financial go up and down completely randomly.
Pair Corralation between Mainstay Mackay and Davis Financial
Assuming the 90 days horizon Mainstay Mackay is expected to generate 6.04 times less return on investment than Davis Financial. But when comparing it to its historical volatility, Mainstay Mackay New is 4.57 times less risky than Davis Financial. It trades about 0.11 of its potential returns per unit of risk. Davis Financial Fund is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 5,615 in Davis Financial Fund on September 4, 2024 and sell it today you would earn a total of 1,464 from holding Davis Financial Fund or generate 26.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.4% |
| Values | Daily Returns |
Mainstay Mackay New vs. Davis Financial Fund
Performance |
| Timeline |
| Mainstay Mackay New |
| Davis Financial |
Mainstay Mackay and Davis Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay Mackay and Davis Financial
The main advantage of trading using opposite Mainstay Mackay and Davis Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Mackay position performs unexpectedly, Davis Financial 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 Davis Financial will offset losses from the drop in Davis Financial's long position.| Mainstay Mackay vs. Mainstay High Yield | Mainstay Mackay vs. Mainstay Tax Free | Mainstay Mackay vs. Mainstay Income Builder | Mainstay Mackay vs. Mainstay Large Cap |
| Davis Financial vs. Multimanager Lifestyle Aggressive | Davis Financial vs. Gmo High Yield | Davis Financial vs. Siit High Yield | Davis Financial vs. Guggenheim High Yield |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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