Correlation Between Morningstar Municipal and Mainstay Balanced
Can any of the company-specific risk be diversified away by investing in both Morningstar Municipal and Mainstay Balanced 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 Morningstar Municipal and Mainstay Balanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Morningstar Municipal Bond and Mainstay Balanced Fund, you can compare the effects of market volatilities on Morningstar Municipal and Mainstay Balanced 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 Morningstar Municipal with a short position of Mainstay Balanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morningstar Municipal and Mainstay Balanced.
Diversification Opportunities for Morningstar Municipal and Mainstay Balanced
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Morningstar and Mainstay is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Morningstar Municipal Bond and Mainstay Balanced Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Balanced and Morningstar Municipal 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 Morningstar Municipal Bond are associated (or correlated) with Mainstay Balanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Balanced has no effect on the direction of Morningstar Municipal i.e., Morningstar Municipal and Mainstay Balanced go up and down completely randomly.
Pair Corralation between Morningstar Municipal and Mainstay Balanced
Assuming the 90 days horizon Morningstar Municipal is expected to generate 3.04 times less return on investment than Mainstay Balanced. But when comparing it to its historical volatility, Morningstar Municipal Bond is 1.95 times less risky than Mainstay Balanced. It trades about 0.21 of its potential returns per unit of risk. Mainstay Balanced Fund is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 3,177 in Mainstay Balanced Fund on September 1, 2024 and sell it today you would earn a total of 113.00 from holding Mainstay Balanced Fund or generate 3.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Morningstar Municipal Bond vs. Mainstay Balanced Fund
Performance |
| Timeline |
| Morningstar Municipal |
| Mainstay Balanced |
Morningstar Municipal and Mainstay Balanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Morningstar Municipal and Mainstay Balanced
The main advantage of trading using opposite Morningstar Municipal and Mainstay Balanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morningstar Municipal position performs unexpectedly, Mainstay Balanced 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 Balanced will offset losses from the drop in Mainstay Balanced's long position.| Morningstar Municipal vs. Dws Government Money | Morningstar Municipal vs. Virtus Seix Government | Morningstar Municipal vs. Ab Government Exchange | Morningstar Municipal vs. Franklin Adjustable Government |
| Mainstay Balanced vs. Mainstay High Yield | Mainstay Balanced vs. Mainstay Tax Free | Mainstay Balanced vs. Mainstay Income Builder | Mainstay Balanced 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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