Correlation Between Mainstay Unconstrained and Mainstay Vertible
Can any of the company-specific risk be diversified away by investing in both Mainstay Unconstrained and Mainstay Vertible 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 Unconstrained and Mainstay Vertible into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mainstay Unconstrained Bond and Mainstay Vertible Fund, you can compare the effects of market volatilities on Mainstay Unconstrained and Mainstay Vertible 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 Unconstrained with a short position of Mainstay Vertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Unconstrained and Mainstay Vertible.
Diversification Opportunities for Mainstay Unconstrained and Mainstay Vertible
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mainstay and Mainstay is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Unconstrained Bond and Mainstay Vertible Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Vertible and Mainstay Unconstrained 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 Unconstrained Bond are associated (or correlated) with Mainstay Vertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Vertible has no effect on the direction of Mainstay Unconstrained i.e., Mainstay Unconstrained and Mainstay Vertible go up and down completely randomly.
Pair Corralation between Mainstay Unconstrained and Mainstay Vertible
Assuming the 90 days horizon Mainstay Unconstrained is expected to generate 1.24 times less return on investment than Mainstay Vertible. But when comparing it to its historical volatility, Mainstay Unconstrained Bond is 1.7 times less risky than Mainstay Vertible. It trades about 0.12 of its potential returns per unit of risk. Mainstay Vertible Fund is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,674 in Mainstay Vertible Fund on September 1, 2024 and sell it today you would earn a total of 273.00 from holding Mainstay Vertible Fund or generate 16.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Mainstay Unconstrained Bond vs. Mainstay Vertible Fund
Performance |
| Timeline |
| Mainstay Unconstrained |
| Mainstay Vertible |
Mainstay Unconstrained and Mainstay Vertible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay Unconstrained and Mainstay Vertible
The main advantage of trading using opposite Mainstay Unconstrained and Mainstay Vertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Unconstrained position performs unexpectedly, Mainstay Vertible 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 Vertible will offset losses from the drop in Mainstay Vertible's long position.The idea behind Mainstay Unconstrained Bond and Mainstay Vertible Fund pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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