Correlation Between Mainstay and Mainstay Income
Can any of the company-specific risk be diversified away by investing in both Mainstay and Mainstay Income 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 and Mainstay Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mainstay Sp 500 and Mainstay Income Builder, you can compare the effects of market volatilities on Mainstay and Mainstay Income 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 with a short position of Mainstay Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay and Mainstay Income.
Diversification Opportunities for Mainstay and Mainstay Income
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Mainstay and Mainstay is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Sp 500 and Mainstay Income Builder in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Income Builder and Mainstay 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 Sp 500 are associated (or correlated) with Mainstay Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Income Builder has no effect on the direction of Mainstay i.e., Mainstay and Mainstay Income go up and down completely randomly.
Pair Corralation between Mainstay and Mainstay Income
Assuming the 90 days horizon Mainstay Sp 500 is expected to generate 1.54 times more return on investment than Mainstay Income. However, Mainstay is 1.54 times more volatile than Mainstay Income Builder. It trades about 0.13 of its potential returns per unit of risk. Mainstay Income Builder is currently generating about 0.14 per unit of risk. If you would invest 5,206 in Mainstay Sp 500 on August 26, 2024 and sell it today you would earn a total of 1,435 from holding Mainstay Sp 500 or generate 27.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mainstay Sp 500 vs. Mainstay Income Builder
Performance |
| Timeline |
| Mainstay Sp 500 |
| Mainstay Income Builder |
Mainstay and Mainstay Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay and Mainstay Income
The main advantage of trading using opposite Mainstay and Mainstay Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay position performs unexpectedly, Mainstay Income 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 Income will offset losses from the drop in Mainstay Income's long position.| Mainstay vs. Mainstay Large Cap | Mainstay vs. Mainstay High Yield | Mainstay vs. Mainstay Income Builder | Mainstay vs. Mainstay Moderate Growth |
| Mainstay Income vs. Mainstay Sp 500 | Mainstay Income vs. Mainstay Vertible Fund | Mainstay Income vs. Mainstay Large Cap | Mainstay Income vs. Mainstay Map Equity |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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