Correlation Between NYSE Composite and Mainstay Moderate
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Mainstay Moderate 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 Moderate 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 Moderate Allocation, you can compare the effects of market volatilities on NYSE Composite and Mainstay Moderate 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 Moderate. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Mainstay Moderate.
Diversification Opportunities for NYSE Composite and Mainstay Moderate
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between NYSE and Mainstay is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Mainstay Moderate Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Moderate 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 Moderate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Moderate has no effect on the direction of NYSE Composite i.e., NYSE Composite and Mainstay Moderate go up and down completely randomly.
Pair Corralation between NYSE Composite and Mainstay Moderate
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.3 times more return on investment than Mainstay Moderate. However, NYSE Composite is 1.3 times more volatile than Mainstay Moderate Allocation. It trades about 0.29 of its potential returns per unit of risk. Mainstay Moderate Allocation is currently generating about 0.25 per unit of risk. If you would invest 1,941,627 in NYSE Composite on August 31, 2024 and sell it today you would earn a total of 79,355 from holding NYSE Composite or generate 4.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Mainstay Moderate Allocation
Performance |
| Timeline |
NYSE Composite and Mainstay Moderate Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Mainstay Moderate Allocation
Pair trading matchups for Mainstay Moderate
Pair Trading with NYSE Composite and Mainstay Moderate
The main advantage of trading using opposite NYSE Composite and Mainstay Moderate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Mainstay Moderate 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 Moderate will offset losses from the drop in Mainstay Moderate's long position.| NYSE Composite vs. Nextplat Corp | NYSE Composite vs. Qualys Inc | NYSE Composite vs. Cadence Design Systems | NYSE Composite vs. Asure Software |
| Mainstay Moderate vs. Small Cap Stock | Mainstay Moderate vs. Tiaa Cref Smallmid Cap Equity | Mainstay Moderate vs. Jhancock Diversified Macro | Mainstay Moderate vs. Tax Managed Mid Small |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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