Correlation Between M Large and Mainstay Moderate
Can any of the company-specific risk be diversified away by investing in both M Large and Mainstay Moderate 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 M Large and Mainstay Moderate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between M Large Cap and Mainstay Moderate Allocation, you can compare the effects of market volatilities on M Large and Mainstay Moderate 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 M Large with a short position of Mainstay Moderate. Check out your portfolio center. Please also check ongoing floating volatility patterns of M Large and Mainstay Moderate.
Diversification Opportunities for M Large and Mainstay Moderate
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MTCGX and MAINSTAY is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding M Large Cap and Mainstay Moderate Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Moderate and M Large 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 M Large Cap are associated (or correlated) with Mainstay Moderate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Moderate has no effect on the direction of M Large i.e., M Large and Mainstay Moderate go up and down completely randomly.
Pair Corralation between M Large and Mainstay Moderate
Assuming the 90 days horizon M Large Cap is expected to generate 2.56 times more return on investment than Mainstay Moderate. However, M Large is 2.56 times more volatile than Mainstay Moderate Allocation. It trades about 0.1 of its potential returns per unit of risk. Mainstay Moderate Allocation is currently generating about 0.15 per unit of risk. If you would invest 2,731 in M Large Cap on September 1, 2024 and sell it today you would earn a total of 960.00 from holding M Large Cap or generate 35.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
M Large Cap vs. Mainstay Moderate Allocation
Performance |
| Timeline |
| M Large Cap |
| Mainstay Moderate |
M Large and Mainstay Moderate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with M Large and Mainstay Moderate
The main advantage of trading using opposite M Large and Mainstay Moderate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if M Large position performs unexpectedly, Mainstay Moderate 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 Moderate will offset losses from the drop in Mainstay Moderate's long position.| M Large vs. Government Securities Fund | M Large vs. Inverse Government Long | M Large vs. Dws Government Money | M Large vs. Dreyfus Government Cash |
| Mainstay Moderate vs. Dana Large Cap | Mainstay Moderate vs. John Hancock Investment | Mainstay Moderate vs. Tax Managed Large Cap | Mainstay Moderate vs. Jhancock Disciplined 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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