Correlation Between Mainstay Mackay and Dreyfus Technology
Can any of the company-specific risk be diversified away by investing in both Mainstay Mackay and Dreyfus Technology 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 Mackay and Dreyfus Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mainstay Mackay Strategic and Dreyfus Technology Growth, you can compare the effects of market volatilities on Mainstay Mackay and Dreyfus Technology 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 Mackay with a short position of Dreyfus Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Mackay and Dreyfus Technology.
Diversification Opportunities for Mainstay Mackay and Dreyfus Technology
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mainstay and Dreyfus is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Mackay Strategic and Dreyfus Technology Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Technology Growth and Mainstay Mackay 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 Mackay Strategic are associated (or correlated) with Dreyfus Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Technology Growth has no effect on the direction of Mainstay Mackay i.e., Mainstay Mackay and Dreyfus Technology go up and down completely randomly.
Pair Corralation between Mainstay Mackay and Dreyfus Technology
Assuming the 90 days horizon Mainstay Mackay is expected to generate 7.88 times less return on investment than Dreyfus Technology. But when comparing it to its historical volatility, Mainstay Mackay Strategic is 4.46 times less risky than Dreyfus Technology. It trades about 0.2 of its potential returns per unit of risk. Dreyfus Technology Growth is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 7,572 in Dreyfus Technology Growth on September 4, 2024 and sell it today you would earn a total of 579.00 from holding Dreyfus Technology Growth or generate 7.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mainstay Mackay Strategic vs. Dreyfus Technology Growth
Performance |
| Timeline |
| Mainstay Mackay Strategic |
| Dreyfus Technology Growth |
Mainstay Mackay and Dreyfus Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay Mackay and Dreyfus Technology
The main advantage of trading using opposite Mainstay Mackay and Dreyfus Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Mackay position performs unexpectedly, Dreyfus Technology 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 Dreyfus Technology will offset losses from the drop in Dreyfus Technology's long position.| Mainstay Mackay vs. Jhancock Diversified Macro | Mainstay Mackay vs. T Rowe Price | Mainstay Mackay vs. The Gabelli Small | Mainstay Mackay vs. Lord Abbett Diversified |
| Dreyfus Technology vs. T Rowe Price | Dreyfus Technology vs. Transamerica Emerging Markets | Dreyfus Technology vs. Black Oak Emerging | Dreyfus Technology vs. T Rowe Price |
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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