Correlation Between Jennison Natural and Mainstay Moderate
Can any of the company-specific risk be diversified away by investing in both Jennison Natural 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 Jennison Natural and Mainstay Moderate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jennison Natural Resources and Mainstay Moderate Allocation, you can compare the effects of market volatilities on Jennison Natural 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 Jennison Natural with a short position of Mainstay Moderate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jennison Natural and Mainstay Moderate.
Diversification Opportunities for Jennison Natural and Mainstay Moderate
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Jennison and Mainstay is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Jennison Natural Resources and Mainstay Moderate Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Moderate and Jennison Natural 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 Jennison Natural Resources 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 Jennison Natural i.e., Jennison Natural and Mainstay Moderate go up and down completely randomly.
Pair Corralation between Jennison Natural and Mainstay Moderate
Assuming the 90 days horizon Jennison Natural Resources is expected to under-perform the Mainstay Moderate. In addition to that, Jennison Natural is 2.24 times more volatile than Mainstay Moderate Allocation. It trades about -0.07 of its total potential returns per unit of risk. Mainstay Moderate Allocation is currently generating about -0.08 per unit of volatility. If you would invest 1,341 in Mainstay Moderate Allocation on January 15, 2025 and sell it today you would lose (67.00) from holding Mainstay Moderate Allocation or give up 5.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jennison Natural Resources vs. Mainstay Moderate Allocation
Performance |
| Timeline |
| Jennison Natural Res |
| Mainstay Moderate |
Jennison Natural and Mainstay Moderate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jennison Natural and Mainstay Moderate
The main advantage of trading using opposite Jennison Natural and Mainstay Moderate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jennison Natural 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.| Jennison Natural vs. Oklahoma College Savings | Jennison Natural vs. Loomis Sayles Inflation | Jennison Natural vs. The Hartford Inflation | Jennison Natural vs. Tiaa Cref Inflation Linked Bond |
| Mainstay Moderate vs. Madison Diversified Income | Mainstay Moderate vs. Lord Abbett Diversified | Mainstay Moderate vs. Jpmorgan Diversified Fund | Mainstay Moderate vs. Delaware Limited Term Diversified |
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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