Correlation Between Mainstay Total and Ab Small
Can any of the company-specific risk be diversified away by investing in both Mainstay Total and Ab Small 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 Ab Small 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 Ab Small Cap, you can compare the effects of market volatilities on Mainstay Total and Ab Small 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 Ab Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Total and Ab Small.
Diversification Opportunities for Mainstay Total and Ab Small
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mainstay and QUAIX is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Total Return and Ab Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Small Cap 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 Ab Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Small Cap has no effect on the direction of Mainstay Total i.e., Mainstay Total and Ab Small go up and down completely randomly.
Pair Corralation between Mainstay Total and Ab Small
Assuming the 90 days horizon Mainstay Total is expected to generate 211.2 times less return on investment than Ab Small. But when comparing it to its historical volatility, Mainstay Total Return is 4.07 times less risky than Ab Small. It trades about 0.0 of its potential returns per unit of risk. Ab Small Cap is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 7,439 in Ab Small Cap on September 13, 2024 and sell it today you would earn a total of 310.00 from holding Ab Small Cap or generate 4.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mainstay Total Return vs. Ab Small Cap
Performance |
| Timeline |
| Mainstay Total Return |
| Ab Small Cap |
Mainstay Total and Ab Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay Total and Ab Small
The main advantage of trading using opposite Mainstay Total and Ab Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Total position performs unexpectedly, Ab Small 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 Ab Small will offset losses from the drop in Ab Small'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 |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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