Correlation Between Small Company and Mainstay Growth
Can any of the company-specific risk be diversified away by investing in both Small Company 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 Small Company and Mainstay Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Small Pany Growth and Mainstay Growth Etf, you can compare the effects of market volatilities on Small Company 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 Small Company with a short position of Mainstay Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Small Company and Mainstay Growth.
Diversification Opportunities for Small Company and Mainstay Growth
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Small and Mainstay is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Small Pany Growth 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 Small Company 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 Small Pany Growth 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 Small Company i.e., Small Company and Mainstay Growth go up and down completely randomly.
Pair Corralation between Small Company and Mainstay Growth
Assuming the 90 days horizon Small Pany Growth is expected to generate 3.04 times more return on investment than Mainstay Growth. However, Small Company is 3.04 times more volatile than Mainstay Growth Etf. It trades about 0.48 of its potential returns per unit of risk. Mainstay Growth Etf is currently generating about 0.16 per unit of risk. If you would invest 1,172 in Small Pany Growth on September 3, 2024 and sell it today you would earn a total of 497.00 from holding Small Pany Growth or generate 42.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Small Pany Growth vs. Mainstay Growth Etf
Performance |
| Timeline |
| Small Pany Growth |
| Mainstay Growth Etf |
Small Company and Mainstay Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Small Company and Mainstay Growth
The main advantage of trading using opposite Small Company and Mainstay Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Small Company 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.| Small Company vs. Mid Cap Growth | Small Company vs. Growth Portfolio Class | Small Company vs. Morgan Stanley Multi | Small Company vs. Emerging Markets Portfolio |
| Mainstay Growth vs. Multimanager Lifestyle Aggressive | Mainstay Growth vs. T Rowe Price | Mainstay Growth vs. Pace High Yield | Mainstay Growth vs. Nuveen High Income |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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