Correlation Between NYSE Composite and Mainstay Balanced
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Mainstay Balanced 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 NYSE Composite and Mainstay Balanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Mainstay Balanced Fund, you can compare the effects of market volatilities on NYSE Composite and Mainstay Balanced 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 NYSE Composite with a short position of Mainstay Balanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Mainstay Balanced.
Diversification Opportunities for NYSE Composite and Mainstay Balanced
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between NYSE and Mainstay is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Mainstay Balanced Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Balanced and NYSE Composite 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 NYSE Composite are associated (or correlated) with Mainstay Balanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Balanced has no effect on the direction of NYSE Composite i.e., NYSE Composite and Mainstay Balanced go up and down completely randomly.
Pair Corralation between NYSE Composite and Mainstay Balanced
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.53 times more return on investment than Mainstay Balanced. However, NYSE Composite is 1.53 times more volatile than Mainstay Balanced Fund. It trades about 0.14 of its potential returns per unit of risk. Mainstay Balanced Fund is currently generating about 0.16 per unit of risk. If you would invest 1,800,696 in NYSE Composite on September 1, 2024 and sell it today you would earn a total of 226,508 from holding NYSE Composite or generate 12.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
NYSE Composite vs. Mainstay Balanced Fund
Performance |
| Timeline |
NYSE Composite and Mainstay Balanced Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Mainstay Balanced Fund
Pair trading matchups for Mainstay Balanced
Pair Trading with NYSE Composite and Mainstay Balanced
The main advantage of trading using opposite NYSE Composite and Mainstay Balanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Mainstay Balanced 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 Balanced will offset losses from the drop in Mainstay Balanced's long position.| NYSE Composite vs. Acumen Pharmaceuticals | NYSE Composite vs. Mind Medicine | NYSE Composite vs. NL Industries | NYSE Composite vs. Ecovyst |
| Mainstay Balanced vs. Mainstay Tax Free | Mainstay Balanced vs. Mainstay Large Cap | Mainstay Balanced vs. Mainstay Large Cap | Mainstay Balanced 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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