Correlation Between Smallcap Growth and Mainstay Income
Can any of the company-specific risk be diversified away by investing in both Smallcap Growth and Mainstay Income 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 Smallcap Growth and Mainstay Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Smallcap Growth Fund and Mainstay Income Builder, you can compare the effects of market volatilities on Smallcap Growth and Mainstay Income 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 Smallcap Growth with a short position of Mainstay Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smallcap Growth and Mainstay Income.
Diversification Opportunities for Smallcap Growth and Mainstay Income
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Smallcap and Mainstay is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Smallcap Growth Fund and Mainstay Income Builder in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Income Builder and Smallcap Growth 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 Smallcap Growth Fund are associated (or correlated) with Mainstay Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Income Builder has no effect on the direction of Smallcap Growth i.e., Smallcap Growth and Mainstay Income go up and down completely randomly.
Pair Corralation between Smallcap Growth and Mainstay Income
Assuming the 90 days horizon Smallcap Growth Fund is expected to generate 2.57 times more return on investment than Mainstay Income. However, Smallcap Growth is 2.57 times more volatile than Mainstay Income Builder. It trades about 0.06 of its potential returns per unit of risk. Mainstay Income Builder is currently generating about 0.05 per unit of risk. If you would invest 1,656 in Smallcap Growth Fund on September 15, 2024 and sell it today you would earn a total of 21.00 from holding Smallcap Growth Fund or generate 1.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Smallcap Growth Fund vs. Mainstay Income Builder
Performance |
| Timeline |
| Smallcap Growth |
| Mainstay Income Builder |
Smallcap Growth and Mainstay Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Smallcap Growth and Mainstay Income
The main advantage of trading using opposite Smallcap Growth and Mainstay Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smallcap Growth position performs unexpectedly, Mainstay Income 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 Income will offset losses from the drop in Mainstay Income's long position.| Smallcap Growth vs. Strategic Asset Management | Smallcap Growth vs. Strategic Asset Management | Smallcap Growth vs. Strategic Asset Management | Smallcap Growth vs. Strategic Asset Management |
| Mainstay Income vs. Smallcap Growth Fund | Mainstay Income vs. Sp Smallcap 600 | Mainstay Income vs. Champlain Small | Mainstay Income vs. Cardinal Small 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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