Correlation Between Prudential Core and Mainstay Convertible
Can any of the company-specific risk be diversified away by investing in both Prudential Core and Mainstay Convertible 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 Prudential Core and Mainstay Convertible into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prudential Core Conservative and Mainstay Vertible Fund, you can compare the effects of market volatilities on Prudential Core and Mainstay Convertible 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 Prudential Core with a short position of Mainstay Convertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential Core and Mainstay Convertible.
Diversification Opportunities for Prudential Core and Mainstay Convertible
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Prudential and Mainstay is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Prudential Core Conservative and Mainstay Vertible Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Convertible and Prudential Core 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 Prudential Core Conservative are associated (or correlated) with Mainstay Convertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Convertible has no effect on the direction of Prudential Core i.e., Prudential Core and Mainstay Convertible go up and down completely randomly.
Pair Corralation between Prudential Core and Mainstay Convertible
Assuming the 90 days horizon Prudential Core Conservative is expected to under-perform the Mainstay Convertible. But the mutual fund apears to be less risky and, when comparing its historical volatility, Prudential Core Conservative is 1.45 times less risky than Mainstay Convertible. The mutual fund trades about -0.01 of its potential returns per unit of risk. The Mainstay Vertible Fund is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 1,823 in Mainstay Vertible Fund on September 4, 2024 and sell it today you would earn a total of 187.00 from holding Mainstay Vertible Fund or generate 10.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prudential Core Conservative vs. Mainstay Vertible Fund
Performance |
| Timeline |
| Prudential Core Cons |
| Mainstay Convertible |
Prudential Core and Mainstay Convertible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prudential Core and Mainstay Convertible
The main advantage of trading using opposite Prudential Core and Mainstay Convertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prudential Core position performs unexpectedly, Mainstay Convertible 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 Convertible will offset losses from the drop in Mainstay Convertible's long position.| Prudential Core vs. Lord Abbett High | Prudential Core vs. Pioneer High Yield | Prudential Core vs. Dunham High Yield | Prudential Core vs. Guggenheim High Yield |
| Mainstay Convertible vs. Mainstay High Yield | Mainstay Convertible vs. Mainstay Tax Free | Mainstay Convertible vs. Mainstay Income Builder | Mainstay Convertible 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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