Correlation Between Federated Pennsylvania and Mainstay Balanced
Can any of the company-specific risk be diversified away by investing in both Federated Pennsylvania 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 Federated Pennsylvania and Mainstay Balanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Pennsylvania Municipal and Mainstay Balanced Fund, you can compare the effects of market volatilities on Federated Pennsylvania 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 Federated Pennsylvania with a short position of Mainstay Balanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Pennsylvania and Mainstay Balanced.
Diversification Opportunities for Federated Pennsylvania and Mainstay Balanced
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Federated and Mainstay is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Federated Pennsylvania Municip and Mainstay Balanced Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Balanced and Federated Pennsylvania 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 Federated Pennsylvania Municipal 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 Federated Pennsylvania i.e., Federated Pennsylvania and Mainstay Balanced go up and down completely randomly.
Pair Corralation between Federated Pennsylvania and Mainstay Balanced
Assuming the 90 days horizon Federated Pennsylvania Municipal is expected to generate 0.14 times more return on investment than Mainstay Balanced. However, Federated Pennsylvania Municipal is 6.93 times less risky than Mainstay Balanced. It trades about 0.34 of its potential returns per unit of risk. Mainstay Balanced Fund is currently generating about -0.22 per unit of risk. If you would invest 1,005 in Federated Pennsylvania Municipal on September 13, 2024 and sell it today you would earn a total of 10.00 from holding Federated Pennsylvania Municipal or generate 1.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Federated Pennsylvania Municip vs. Mainstay Balanced Fund
Performance |
| Timeline |
| Federated Pennsylvania |
| Mainstay Balanced |
Federated Pennsylvania and Mainstay Balanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Pennsylvania and Mainstay Balanced
The main advantage of trading using opposite Federated Pennsylvania and Mainstay Balanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Pennsylvania 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.| Federated Pennsylvania vs. Goehring Rozencwajg Resources | Federated Pennsylvania vs. Hennessy Bp Energy | Federated Pennsylvania vs. Gmo Resources | Federated Pennsylvania vs. Gamco Natural Resources |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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