Correlation Between Deutsche Multi and Mainstay Balanced
Can any of the company-specific risk be diversified away by investing in both Deutsche Multi 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 Deutsche Multi and Mainstay Balanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deutsche Multi Asset Moderate and Mainstay Balanced Fund, you can compare the effects of market volatilities on Deutsche Multi 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 Deutsche Multi with a short position of Mainstay Balanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Multi and Mainstay Balanced.
Diversification Opportunities for Deutsche Multi and Mainstay Balanced
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Deutsche and Mainstay is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Multi Asset Moderate and Mainstay Balanced Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Balanced and Deutsche Multi 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 Deutsche Multi Asset Moderate 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 Deutsche Multi i.e., Deutsche Multi and Mainstay Balanced go up and down completely randomly.
Pair Corralation between Deutsche Multi and Mainstay Balanced
Assuming the 90 days horizon Deutsche Multi Asset Moderate is expected to generate 1.06 times more return on investment than Mainstay Balanced. However, Deutsche Multi is 1.06 times more volatile than Mainstay Balanced Fund. It trades about 0.09 of its potential returns per unit of risk. Mainstay Balanced Fund is currently generating about 0.05 per unit of risk. If you would invest 917.00 in Deutsche Multi Asset Moderate on September 14, 2024 and sell it today you would earn a total of 114.00 from holding Deutsche Multi Asset Moderate or generate 12.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Deutsche Multi Asset Moderate vs. Mainstay Balanced Fund
Performance |
| Timeline |
| Deutsche Multi Asset |
| Mainstay Balanced |
Deutsche Multi and Mainstay Balanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Multi and Mainstay Balanced
The main advantage of trading using opposite Deutsche Multi and Mainstay Balanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Multi 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.| Deutsche Multi vs. Df Dent Small | Deutsche Multi vs. Kinetics Small Cap | Deutsche Multi vs. Franklin Small Cap | Deutsche Multi vs. Pace Smallmedium Value |
| Mainstay Balanced vs. Mainstay High Yield | Mainstay Balanced vs. Mainstay Tax Free | Mainstay Balanced vs. Mainstay Income Builder | Mainstay Balanced vs. Mainstay Large 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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