Correlation Between Mainstay Tax and Schwab Treasury
Can any of the company-specific risk be diversified away by investing in both Mainstay Tax and Schwab Treasury 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 Tax and Schwab Treasury into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mainstay Tax Free and Schwab Treasury Inflation, you can compare the effects of market volatilities on Mainstay Tax and Schwab Treasury 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 Tax with a short position of Schwab Treasury. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Tax and Schwab Treasury.
Diversification Opportunities for Mainstay Tax and Schwab Treasury
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mainstay and Schwab is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Tax Free and Schwab Treasury Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schwab Treasury Inflation and Mainstay Tax 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 Tax Free are associated (or correlated) with Schwab Treasury. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schwab Treasury Inflation has no effect on the direction of Mainstay Tax i.e., Mainstay Tax and Schwab Treasury go up and down completely randomly.
Pair Corralation between Mainstay Tax and Schwab Treasury
Assuming the 90 days horizon Mainstay Tax Free is expected to generate 1.16 times more return on investment than Schwab Treasury. However, Mainstay Tax is 1.16 times more volatile than Schwab Treasury Inflation. It trades about 0.17 of its potential returns per unit of risk. Schwab Treasury Inflation is currently generating about 0.05 per unit of risk. If you would invest 932.00 in Mainstay Tax Free on August 29, 2024 and sell it today you would earn a total of 11.00 from holding Mainstay Tax Free or generate 1.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Mainstay Tax Free vs. Schwab Treasury Inflation
Performance |
| Timeline |
| Mainstay Tax Free |
| Schwab Treasury Inflation |
Mainstay Tax and Schwab Treasury Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay Tax and Schwab Treasury
The main advantage of trading using opposite Mainstay Tax and Schwab Treasury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Tax position performs unexpectedly, Schwab Treasury 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 Schwab Treasury will offset losses from the drop in Schwab Treasury's long position.| Mainstay Tax vs. Kinetics Global Fund | Mainstay Tax vs. Us Global Leaders | Mainstay Tax vs. Ab Global Risk | Mainstay Tax vs. Ab Global Bond |
| Schwab Treasury vs. Astor Longshort Fund | Schwab Treasury vs. Siit Ultra Short | Schwab Treasury vs. Aqr Long Short Equity | Schwab Treasury vs. Touchstone Ultra Short |
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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