Correlation Between Mainstay Growth and Payden Government
Can any of the company-specific risk be diversified away by investing in both Mainstay Growth and Payden Government 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 Growth and Payden Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mainstay Growth Etf and Payden Government Fund, you can compare the effects of market volatilities on Mainstay Growth and Payden Government 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 Growth with a short position of Payden Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Growth and Payden Government.
Diversification Opportunities for Mainstay Growth and Payden Government
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mainstay and Payden is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Growth Etf and Payden Government Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payden Government and Mainstay Growth 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 Growth Etf are associated (or correlated) with Payden Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payden Government has no effect on the direction of Mainstay Growth i.e., Mainstay Growth and Payden Government go up and down completely randomly.
Pair Corralation between Mainstay Growth and Payden Government
Assuming the 90 days horizon Mainstay Growth Etf is expected to generate 3.68 times more return on investment than Payden Government. However, Mainstay Growth is 3.68 times more volatile than Payden Government Fund. It trades about 0.08 of its potential returns per unit of risk. Payden Government Fund is currently generating about 0.23 per unit of risk. If you would invest 1,476 in Mainstay Growth Etf on September 13, 2024 and sell it today you would earn a total of 10.00 from holding Mainstay Growth Etf or generate 0.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mainstay Growth Etf vs. Payden Government Fund
Performance |
| Timeline |
| Mainstay Growth Etf |
| Payden Government |
Mainstay Growth and Payden Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay Growth and Payden Government
The main advantage of trading using opposite Mainstay Growth and Payden Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Growth position performs unexpectedly, Payden Government 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 Payden Government will offset losses from the drop in Payden Government's long position.| Mainstay Growth vs. Mainstay High Yield | Mainstay Growth vs. Mainstay Tax Free | Mainstay Growth vs. Mainstay Income Builder | Mainstay Growth vs. Mainstay Large Cap |
| Payden Government vs. Payden Porate Bond | Payden Government vs. Payden Absolute Return | Payden Government vs. Payden Absolute Return | Payden Government vs. Payden Emerging Markets |
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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