Correlation Between Metropolitan West and Mainstay Mackay
Can any of the company-specific risk be diversified away by investing in both Metropolitan West and Mainstay Mackay 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 Metropolitan West and Mainstay Mackay into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metropolitan West High and Mainstay Mackay Tax, you can compare the effects of market volatilities on Metropolitan West and Mainstay Mackay 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 Metropolitan West with a short position of Mainstay Mackay. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metropolitan West and Mainstay Mackay.
Diversification Opportunities for Metropolitan West and Mainstay Mackay
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Metropolitan and Mainstay is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Metropolitan West High and Mainstay Mackay Tax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Mackay Tax and Metropolitan West 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 Metropolitan West High are associated (or correlated) with Mainstay Mackay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Mackay Tax has no effect on the direction of Metropolitan West i.e., Metropolitan West and Mainstay Mackay go up and down completely randomly.
Pair Corralation between Metropolitan West and Mainstay Mackay
Assuming the 90 days horizon Metropolitan West is expected to generate 5.02 times less return on investment than Mainstay Mackay. But when comparing it to its historical volatility, Metropolitan West High is 3.01 times less risky than Mainstay Mackay. It trades about 0.1 of its potential returns per unit of risk. Mainstay Mackay Tax is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 936.00 in Mainstay Mackay Tax on September 4, 2024 and sell it today you would earn a total of 10.00 from holding Mainstay Mackay Tax or generate 1.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Metropolitan West High vs. Mainstay Mackay Tax
Performance |
| Timeline |
| Metropolitan West High |
| Mainstay Mackay Tax |
Metropolitan West and Mainstay Mackay Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metropolitan West and Mainstay Mackay
The main advantage of trading using opposite Metropolitan West and Mainstay Mackay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metropolitan West position performs unexpectedly, Mainstay Mackay 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 Mackay will offset losses from the drop in Mainstay Mackay's long position.| Metropolitan West vs. Federated Total Return | Metropolitan West vs. Global Bond Fund | Metropolitan West vs. Government Bond Fund | Metropolitan West vs. Aberdeen Global High |
| Mainstay Mackay vs. Rationalpier 88 Convertible | Mainstay Mackay vs. Fidelity Sai Convertible | Mainstay Mackay vs. Lord Abbett Convertible | Mainstay Mackay vs. Allianzgi Convertible Income |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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