Correlation Between Mainstay Mackay and Mainstay Tax
Can any of the company-specific risk be diversified away by investing in both Mainstay Mackay and Mainstay Tax 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 Mainstay Tax 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 Mainstay Tax Free, you can compare the effects of market volatilities on Mainstay Mackay and Mainstay Tax 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 Mainstay Tax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Mackay and Mainstay Tax.
Diversification Opportunities for Mainstay Mackay and Mainstay Tax
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Mainstay and Mainstay is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Mackay Strategic and Mainstay Tax Free in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Tax Free 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 Mainstay Tax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Tax Free has no effect on the direction of Mainstay Mackay i.e., Mainstay Mackay and Mainstay Tax go up and down completely randomly.
Pair Corralation between Mainstay Mackay and Mainstay Tax
Assuming the 90 days horizon Mainstay Mackay is expected to generate 1.06 times less return on investment than Mainstay Tax. But when comparing it to its historical volatility, Mainstay Mackay Strategic is 1.3 times less risky than Mainstay Tax. It trades about 0.15 of its potential returns per unit of risk. Mainstay Tax Free is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 860.00 in Mainstay Tax Free on November 28, 2024 and sell it today you would earn a total of 80.00 from holding Mainstay Tax Free or generate 9.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mainstay Mackay Strategic vs. Mainstay Tax Free
Performance |
| Timeline |
| Mainstay Mackay Strategic |
| Mainstay Tax Free |
Mainstay Mackay and Mainstay Tax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay Mackay and Mainstay Tax
The main advantage of trading using opposite Mainstay Mackay and Mainstay Tax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Mackay position performs unexpectedly, Mainstay Tax 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 Tax will offset losses from the drop in Mainstay Tax's long position.| Mainstay Mackay vs. Delaware Limited Term Diversified | Mainstay Mackay vs. Stone Ridge Diversified | Mainstay Mackay vs. Madison Diversified Income | Mainstay Mackay vs. American Century Diversified |
| Mainstay Tax vs. Vanguard Intermediate Term Government | Mainstay Tax vs. Legg Mason Partners | Mainstay Tax vs. Aig Government Money | Mainstay Tax vs. Bbh Intermediate Municipal |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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