Correlation Between Microsoft and Mainstay Growth
Can any of the company-specific risk be diversified away by investing in both Microsoft and Mainstay Growth 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 Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Mainstay Growth Etf, you can compare the effects of market volatilities on Microsoft and Mainstay Growth 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 Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Mainstay Growth.
Diversification Opportunities for Microsoft and Mainstay Growth
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Microsoft and Mainstay is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Mainstay Growth Etf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Growth Etf 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 Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Growth Etf has no effect on the direction of Microsoft i.e., Microsoft and Mainstay Growth go up and down completely randomly.
Pair Corralation between Microsoft and Mainstay Growth
Given the investment horizon of 90 days Microsoft is expected to under-perform the Mainstay Growth. In addition to that, Microsoft is 2.47 times more volatile than Mainstay Growth Etf. It trades about -0.04 of its total potential returns per unit of risk. Mainstay Growth Etf is currently generating about 0.19 per unit of volatility. If you would invest 1,461 in Mainstay Growth Etf on August 28, 2024 and sell it today you would earn a total of 39.00 from holding Mainstay Growth Etf or generate 2.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Microsoft vs. Mainstay Growth Etf
Performance |
| Timeline |
| Microsoft |
| Mainstay Growth Etf |
Microsoft and Mainstay Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Mainstay Growth
The main advantage of trading using opposite Microsoft and Mainstay Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Mainstay Growth 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 Growth will offset losses from the drop in Mainstay Growth's long position.| Microsoft vs. GigaCloud Technology Class | Microsoft vs. Arqit Quantum | Microsoft vs. Cemtrex | Microsoft vs. Paysafe |
| Mainstay Growth vs. Siit Emerging Markets | Mainstay Growth vs. Rbc Bluebay Emerging | Mainstay Growth vs. Franklin Emerging Market | Mainstay Growth vs. Shelton 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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