Correlation Between Mainstay Mon and Franklin Natural
Can any of the company-specific risk be diversified away by investing in both Mainstay Mon and Franklin Natural 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 Mon and Franklin Natural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mainstay Mon Stock and Franklin Natural Resources, you can compare the effects of market volatilities on Mainstay Mon and Franklin Natural 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 Mon with a short position of Franklin Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Mon and Franklin Natural.
Diversification Opportunities for Mainstay Mon and Franklin Natural
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mainstay and Franklin is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Mon Stock and Franklin Natural Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Natural Res and Mainstay Mon 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 Mon Stock are associated (or correlated) with Franklin Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Natural Res has no effect on the direction of Mainstay Mon i.e., Mainstay Mon and Franklin Natural go up and down completely randomly.
Pair Corralation between Mainstay Mon and Franklin Natural
Assuming the 90 days horizon Mainstay Mon Stock is expected to generate 0.87 times more return on investment than Franklin Natural. However, Mainstay Mon Stock is 1.15 times less risky than Franklin Natural. It trades about -0.04 of its potential returns per unit of risk. Franklin Natural Resources is currently generating about -0.11 per unit of risk. If you would invest 4,134 in Mainstay Mon Stock on September 12, 2024 and sell it today you would lose (31.00) from holding Mainstay Mon Stock or give up 0.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mainstay Mon Stock vs. Franklin Natural Resources
Performance |
| Timeline |
| Mainstay Mon Stock |
| Franklin Natural Res |
Mainstay Mon and Franklin Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay Mon and Franklin Natural
The main advantage of trading using opposite Mainstay Mon and Franklin Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Mon position performs unexpectedly, Franklin Natural 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 Franklin Natural will offset losses from the drop in Franklin Natural's long position.| Mainstay Mon vs. Vanguard Total Stock | Mainstay Mon vs. Vanguard 500 Index | Mainstay Mon vs. Vanguard Total Stock | Mainstay Mon vs. Vanguard Total Stock |
| Franklin Natural vs. Victory Rs Partners | Franklin Natural vs. Queens Road Small | Franklin Natural vs. Royce Opportunity Fund | Franklin Natural vs. Pace Smallmedium Value |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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