Correlation Between Mainstay Floating and Adams Natural
Can any of the company-specific risk be diversified away by investing in both Mainstay Floating and Adams Natural 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 Floating and Adams Natural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mainstay Floating Rate and Adams Natural Resources, you can compare the effects of market volatilities on Mainstay Floating and Adams Natural 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 Floating with a short position of Adams Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Floating and Adams Natural.
Diversification Opportunities for Mainstay Floating and Adams Natural
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mainstay and Adams is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Floating Rate and Adams Natural Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adams Natural Resources and Mainstay Floating 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 Floating Rate are associated (or correlated) with Adams Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adams Natural Resources has no effect on the direction of Mainstay Floating i.e., Mainstay Floating and Adams Natural go up and down completely randomly.
Pair Corralation between Mainstay Floating and Adams Natural
Assuming the 90 days horizon Mainstay Floating is expected to generate 4.97 times less return on investment than Adams Natural. But when comparing it to its historical volatility, Mainstay Floating Rate is 7.64 times less risky than Adams Natural. It trades about 0.22 of its potential returns per unit of risk. Adams Natural Resources is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 2,167 in Adams Natural Resources on September 4, 2024 and sell it today you would earn a total of 175.00 from holding Adams Natural Resources or generate 8.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.44% |
| Values | Daily Returns |
Mainstay Floating Rate vs. Adams Natural Resources
Performance |
| Timeline |
| Mainstay Floating Rate |
| Adams Natural Resources |
Mainstay Floating and Adams Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay Floating and Adams Natural
The main advantage of trading using opposite Mainstay Floating and Adams Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Floating position performs unexpectedly, Adams Natural 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 Adams Natural will offset losses from the drop in Adams Natural's long position.| Mainstay Floating vs. Adams Natural Resources | Mainstay Floating vs. Dreyfus Natural Resources | Mainstay Floating vs. Tortoise Energy Independence | Mainstay Floating vs. Invesco Energy Fund |
| Adams Natural vs. Liberty All Star | Adams Natural vs. Tri Continental Closed | Adams Natural vs. Royce Value Closed | Adams Natural vs. Central Securities |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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