Correlation Between Mainstay Income and Mainstay Convertible
Can any of the company-specific risk be diversified away by investing in both Mainstay Income and Mainstay Convertible 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 Income and Mainstay Convertible into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mainstay Income Builder and Mainstay Vertible Fund, you can compare the effects of market volatilities on Mainstay Income and Mainstay Convertible 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 Income with a short position of Mainstay Convertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Income and Mainstay Convertible.
Diversification Opportunities for Mainstay Income and Mainstay Convertible
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mainstay and Mainstay is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Income Builder and Mainstay Vertible Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Convertible and Mainstay Income 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 Income Builder are associated (or correlated) with Mainstay Convertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Convertible has no effect on the direction of Mainstay Income i.e., Mainstay Income and Mainstay Convertible go up and down completely randomly.
Pair Corralation between Mainstay Income and Mainstay Convertible
Assuming the 90 days horizon Mainstay Income Builder is expected to generate 1.04 times more return on investment than Mainstay Convertible. However, Mainstay Income is 1.04 times more volatile than Mainstay Vertible Fund. It trades about 0.07 of its potential returns per unit of risk. Mainstay Vertible Fund is currently generating about 0.05 per unit of risk. If you would invest 1,722 in Mainstay Income Builder on October 20, 2024 and sell it today you would earn a total of 329.00 from holding Mainstay Income Builder or generate 19.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mainstay Income Builder vs. Mainstay Vertible Fund
Performance |
| Timeline |
| Mainstay Income Builder |
| Mainstay Convertible |
Mainstay Income and Mainstay Convertible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay Income and Mainstay Convertible
The main advantage of trading using opposite Mainstay Income and Mainstay Convertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Income position performs unexpectedly, Mainstay Convertible 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 Convertible will offset losses from the drop in Mainstay Convertible's long position.| Mainstay Income vs. Mainstay Sp 500 | Mainstay Income vs. Mainstay Vertible Fund | Mainstay Income vs. Mainstay Large Cap | Mainstay Income vs. Mainstay Map Equity |
| Mainstay Convertible vs. Mainstay High Yield | Mainstay Convertible vs. Mainstay Income Builder | Mainstay Convertible vs. Mainstay Sp 500 | Mainstay Convertible 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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