Correlation Between Mainstay New and Ab Value
Can any of the company-specific risk be diversified away by investing in both Mainstay New and Ab Value 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 Ab Value 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 Ab Value Fund, you can compare the effects of market volatilities on Mainstay New and Ab Value 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 Ab Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay New and Ab Value.
Diversification Opportunities for Mainstay New and Ab Value
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Mainstay and ABVCX is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay New York and Ab Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Value Fund 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 Ab Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Value Fund has no effect on the direction of Mainstay New i.e., Mainstay New and Ab Value go up and down completely randomly.
Pair Corralation between Mainstay New and Ab Value
Assuming the 90 days horizon Mainstay New is expected to generate 4.81 times less return on investment than Ab Value. But when comparing it to its historical volatility, Mainstay New York is 2.26 times less risky than Ab Value. It trades about 0.2 of its potential returns per unit of risk. Ab Value Fund is currently generating about 0.42 of returns per unit of risk over similar time horizon. If you would invest 1,928 in Ab Value Fund on September 4, 2024 and sell it today you would earn a total of 148.00 from holding Ab Value Fund or generate 7.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mainstay New York vs. Ab Value Fund
Performance |
| Timeline |
| Mainstay New York |
| Ab Value Fund |
Mainstay New and Ab Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay New and Ab Value
The main advantage of trading using opposite Mainstay New and Ab Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay New position performs unexpectedly, Ab Value 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 Ab Value will offset losses from the drop in Ab Value's long position.| Mainstay New vs. Ab Value Fund | Mainstay New vs. Qs Large Cap | Mainstay New vs. Fabxx | Mainstay New vs. Leggmason Partners Institutional |
| Ab Value vs. Balanced Fund Investor | Ab Value vs. T Rowe Price | Ab Value vs. Ab Small Cap | Ab Value vs. Qs Growth Fund |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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