Correlation Between Mainstay Total and Mainstay Tax
Can any of the company-specific risk be diversified away by investing in both Mainstay Total 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 Total 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 Total Return and Mainstay Tax Free, you can compare the effects of market volatilities on Mainstay Total 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 Total with a short position of Mainstay Tax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Total and Mainstay Tax.
Diversification Opportunities for Mainstay Total and Mainstay Tax
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mainstay and Mainstay is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Total Return 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 Total 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 Total Return 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 Total i.e., Mainstay Total and Mainstay Tax go up and down completely randomly.
Pair Corralation between Mainstay Total and Mainstay Tax
Assuming the 90 days horizon Mainstay Total is expected to generate 1.15 times less return on investment than Mainstay Tax. In addition to that, Mainstay Total is 1.48 times more volatile than Mainstay Tax Free. It trades about 0.23 of its total potential returns per unit of risk. Mainstay Tax Free is currently generating about 0.4 per unit of volatility. If you would invest 938.00 in Mainstay Tax Free on September 13, 2024 and sell it today you would earn a total of 13.00 from holding Mainstay Tax Free or generate 1.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mainstay Total Return vs. Mainstay Tax Free
Performance |
| Timeline |
| Mainstay Total Return |
| Mainstay Tax Free |
Mainstay Total and Mainstay Tax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay Total and Mainstay Tax
The main advantage of trading using opposite Mainstay Total and Mainstay Tax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Total 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 Total vs. Mainstay Tax Free | Mainstay Total vs. Mainstay Large Cap | Mainstay Total vs. Mainstay Large Cap | Mainstay Total vs. Mainstay Large Cap |
| Mainstay Tax vs. Deutsche Global Inflation | Mainstay Tax vs. Blackrock Inflation Protected | Mainstay Tax vs. Guggenheim Managed Futures | Mainstay Tax vs. Guidepath Managed Futures |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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