Correlation Between Mainstay Total and T Rowe
Can any of the company-specific risk be diversified away by investing in both Mainstay Total and T Rowe 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 T Rowe 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 T Rowe Price, you can compare the effects of market volatilities on Mainstay Total and T Rowe 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 T Rowe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Total and T Rowe.
Diversification Opportunities for Mainstay Total and T Rowe
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mainstay and PATFX is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Total Return and T Rowe Price in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T Rowe Price 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 T Rowe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of T Rowe Price has no effect on the direction of Mainstay Total i.e., Mainstay Total and T Rowe go up and down completely randomly.
Pair Corralation between Mainstay Total and T Rowe
Assuming the 90 days horizon Mainstay Total is expected to generate 1.12 times less return on investment than T Rowe. In addition to that, Mainstay Total is 1.54 times more volatile than T Rowe Price. It trades about 0.05 of its total potential returns per unit of risk. T Rowe Price is currently generating about 0.08 per unit of volatility. If you would invest 1,018 in T Rowe Price on September 3, 2024 and sell it today you would earn a total of 122.00 from holding T Rowe Price or generate 11.98% 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. T Rowe Price
Performance |
| Timeline |
| Mainstay Total Return |
| T Rowe Price |
Mainstay Total and T Rowe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay Total and T Rowe
The main advantage of trading using opposite Mainstay Total and T Rowe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Total position performs unexpectedly, T Rowe 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 T Rowe will offset losses from the drop in T Rowe's long position.| Mainstay Total vs. Pioneer High Yield | Mainstay Total vs. Msift High Yield | Mainstay Total vs. Virtus High Yield | Mainstay Total vs. Goldman Sachs High |
| T Rowe vs. Nuveen High Yield | T Rowe vs. Nuveen High Yield | T Rowe vs. Nuveen High Yield | T Rowe vs. Nuveen High Yield |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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