Correlation Between Pace Smallmedium and Mainstay Large
Can any of the company-specific risk be diversified away by investing in both Pace Smallmedium and Mainstay Large 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 Pace Smallmedium and Mainstay Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pace Smallmedium Value and Mainstay Large Cap, you can compare the effects of market volatilities on Pace Smallmedium and Mainstay Large 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 Pace Smallmedium with a short position of Mainstay Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pace Smallmedium and Mainstay Large.
Diversification Opportunities for Pace Smallmedium and Mainstay Large
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Pace and Mainstay is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Pace Smallmedium Value and Mainstay Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Large Cap and Pace Smallmedium 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 Pace Smallmedium Value are associated (or correlated) with Mainstay Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Large Cap has no effect on the direction of Pace Smallmedium i.e., Pace Smallmedium and Mainstay Large go up and down completely randomly.
Pair Corralation between Pace Smallmedium and Mainstay Large
Assuming the 90 days horizon Pace Smallmedium Value is expected to generate 0.11 times more return on investment than Mainstay Large. However, Pace Smallmedium Value is 8.93 times less risky than Mainstay Large. It trades about 0.04 of its potential returns per unit of risk. Mainstay Large Cap is currently generating about -0.21 per unit of risk. If you would invest 2,149 in Pace Smallmedium Value on September 13, 2024 and sell it today you would earn a total of 14.00 from holding Pace Smallmedium Value or generate 0.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pace Smallmedium Value vs. Mainstay Large Cap
Performance |
| Timeline |
| Pace Smallmedium Value |
| Mainstay Large Cap |
Pace Smallmedium and Mainstay Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pace Smallmedium and Mainstay Large
The main advantage of trading using opposite Pace Smallmedium and Mainstay Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pace Smallmedium position performs unexpectedly, Mainstay Large 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 Large will offset losses from the drop in Mainstay Large's long position.| Pace Smallmedium vs. Pace Smallmedium Value | Pace Smallmedium vs. Pace International Equity | Pace Smallmedium vs. Ubs Allocation Fund | Pace Smallmedium vs. Ubs Allocation Fund |
| Mainstay Large vs. Omni Small Cap Value | Mainstay Large vs. Pace Smallmedium Value | Mainstay Large vs. Great West Loomis Sayles | Mainstay Large vs. Amg River Road |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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