Correlation Between New Perspective and Mainstay Pinestone
Can any of the company-specific risk be diversified away by investing in both New Perspective and Mainstay Pinestone 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 New Perspective and Mainstay Pinestone into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Perspective Fund and Mainstay Pinestone Global, you can compare the effects of market volatilities on New Perspective and Mainstay Pinestone 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 New Perspective with a short position of Mainstay Pinestone. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Perspective and Mainstay Pinestone.
Diversification Opportunities for New Perspective and Mainstay Pinestone
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between New and Mainstay is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding New Perspective Fund and Mainstay Pinestone Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Pinestone Global and New Perspective 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 New Perspective Fund are associated (or correlated) with Mainstay Pinestone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Pinestone Global has no effect on the direction of New Perspective i.e., New Perspective and Mainstay Pinestone go up and down completely randomly.
Pair Corralation between New Perspective and Mainstay Pinestone
Assuming the 90 days horizon New Perspective Fund is expected to generate 1.17 times more return on investment than Mainstay Pinestone. However, New Perspective is 1.17 times more volatile than Mainstay Pinestone Global. It trades about 0.2 of its potential returns per unit of risk. Mainstay Pinestone Global is currently generating about 0.21 per unit of risk. If you would invest 6,012 in New Perspective Fund on September 2, 2024 and sell it today you would earn a total of 157.00 from holding New Perspective Fund or generate 2.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
New Perspective Fund vs. Mainstay Pinestone Global
Performance |
| Timeline |
| New Perspective |
| Mainstay Pinestone Global |
New Perspective and Mainstay Pinestone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Perspective and Mainstay Pinestone
The main advantage of trading using opposite New Perspective and Mainstay Pinestone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Perspective position performs unexpectedly, Mainstay Pinestone 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 Pinestone will offset losses from the drop in Mainstay Pinestone's long position.| New Perspective vs. Smallcap World Fund | New Perspective vs. New World Fund | New Perspective vs. New Perspective Fund | New Perspective vs. Investment Of America |
| Mainstay Pinestone vs. Mainstay High Yield | Mainstay Pinestone vs. Mainstay Tax Free | Mainstay Pinestone vs. Mainstay Income Builder | Mainstay Pinestone vs. Mainstay Large Cap |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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