Correlation Between Microsoft and Mainstay High
Can any of the company-specific risk be diversified away by investing in both Microsoft and Mainstay High 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 Microsoft and Mainstay High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Mainstay High Yield, you can compare the effects of market volatilities on Microsoft and Mainstay High 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 Microsoft with a short position of Mainstay High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Mainstay High.
Diversification Opportunities for Microsoft and Mainstay High
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Microsoft and Mainstay is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Mainstay High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay High Yield and Microsoft 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 Microsoft are associated (or correlated) with Mainstay High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay High Yield has no effect on the direction of Microsoft i.e., Microsoft and Mainstay High go up and down completely randomly.
Pair Corralation between Microsoft and Mainstay High
Given the investment horizon of 90 days Microsoft is expected to under-perform the Mainstay High. In addition to that, Microsoft is 4.3 times more volatile than Mainstay High Yield. It trades about -0.06 of its total potential returns per unit of risk. Mainstay High Yield is currently generating about 0.09 per unit of volatility. If you would invest 1,191 in Mainstay High Yield on August 26, 2024 and sell it today you would earn a total of 9.00 from holding Mainstay High Yield or generate 0.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microsoft vs. Mainstay High Yield
Performance |
| Timeline |
| Microsoft |
| Mainstay High Yield |
Microsoft and Mainstay High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Mainstay High
The main advantage of trading using opposite Microsoft and Mainstay High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Mainstay High 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 High will offset losses from the drop in Mainstay High's long position.| Microsoft vs. GigaCloud Technology Class | Microsoft vs. Arqit Quantum | Microsoft vs. Cemtrex | Microsoft vs. Rapid7 Inc |
| Mainstay High vs. Mainstay Tax Free | Mainstay High vs. Mainstay Large Cap | Mainstay High vs. Mainstay Large Cap | Mainstay High vs. Mainstay Large Cap |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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