Correlation Between Pace Small/medium and Mainstay Large
Can any of the company-specific risk be diversified away by investing in both Pace Small/medium 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 Small/medium 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 Small/medium 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 Small/medium with a short position of Mainstay Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pace Small/medium and Mainstay Large.
Diversification Opportunities for Pace Small/medium and Mainstay Large
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Pace and Mainstay is 0.92. 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 Small/medium 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 Small/medium i.e., Pace Small/medium and Mainstay Large go up and down completely randomly.
Pair Corralation between Pace Small/medium and Mainstay Large
Assuming the 90 days horizon Pace Smallmedium Value is expected to generate 0.96 times more return on investment than Mainstay Large. However, Pace Smallmedium Value is 1.05 times less risky than Mainstay Large. It trades about 0.13 of its potential returns per unit of risk. Mainstay Large Cap is currently generating about 0.11 per unit of risk. If you would invest 2,021 in Pace Smallmedium Value on August 30, 2024 and sell it today you would earn a total of 183.00 from holding Pace Smallmedium Value or generate 9.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pace Smallmedium Value vs. Mainstay Large Cap
Performance |
| Timeline |
| Pace Smallmedium Value |
| Mainstay Large Cap |
Pace Small/medium and Mainstay Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pace Small/medium and Mainstay Large
The main advantage of trading using opposite Pace Small/medium and Mainstay Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pace Small/medium 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 Small/medium vs. Ab Bond Inflation | Pace Small/medium vs. T Rowe Price | Pace Small/medium vs. Legg Mason Partners | Pace Small/medium vs. Vanguard Emerging Markets |
| Mainstay Large vs. Growth Fund Of | Mainstay Large vs. HUMANA INC | Mainstay Large vs. Aquagold International | Mainstay Large vs. Barloworld Ltd ADR |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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