Correlation Between Mainstay California and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Mainstay California and Dow Jones 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 California and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mainstay California Tax and Dow Jones Industrial, you can compare the effects of market volatilities on Mainstay California and Dow Jones 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 California with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay California and Dow Jones.
Diversification Opportunities for Mainstay California and Dow Jones
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mainstay and Dow is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay California Tax and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Mainstay California 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 California Tax are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Mainstay California i.e., Mainstay California and Dow Jones go up and down completely randomly.
Pair Corralation between Mainstay California and Dow Jones
Assuming the 90 days horizon Mainstay California Tax is expected to generate 0.35 times more return on investment than Dow Jones. However, Mainstay California Tax is 2.83 times less risky than Dow Jones. It trades about 0.2 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about -0.19 per unit of risk. If you would invest 964.00 in Mainstay California Tax on November 28, 2024 and sell it today you would earn a total of 9.00 from holding Mainstay California Tax or generate 0.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mainstay California Tax vs. Dow Jones Industrial
Performance |
| Timeline |
Mainstay California and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Mainstay California Tax
Pair trading matchups for Mainstay California
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Mainstay California and Dow Jones
The main advantage of trading using opposite Mainstay California and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay California position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Mainstay California vs. Calvert Moderate Allocation | Mainstay California vs. Enhanced Large Pany | Mainstay California vs. Guidemark Large Cap | Mainstay California vs. Knights Of Umbus |
| Dow Jones vs. Gladstone Investment | Dow Jones vs. BW Offshore Limited | Dow Jones vs. Fidus Investment Corp | Dow Jones vs. Aperture Health |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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