Correlation Between T Rowe and Mainstay
Can any of the company-specific risk be diversified away by investing in both T Rowe and Mainstay 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 T Rowe and Mainstay into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between T Rowe Price and Mainstay Sp 500, you can compare the effects of market volatilities on T Rowe and Mainstay 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 T Rowe with a short position of Mainstay. Check out your portfolio center. Please also check ongoing floating volatility patterns of T Rowe and Mainstay.
Diversification Opportunities for T Rowe and Mainstay
Very weak diversification
The 3 months correlation between PRINX and Mainstay is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding T Rowe Price and Mainstay Sp 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Sp 500 and T Rowe 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 T Rowe Price are associated (or correlated) with Mainstay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Sp 500 has no effect on the direction of T Rowe i.e., T Rowe and Mainstay go up and down completely randomly.
Pair Corralation between T Rowe and Mainstay
Assuming the 90 days horizon T Rowe Price is expected to generate 0.3 times more return on investment than Mainstay. However, T Rowe Price is 3.3 times less risky than Mainstay. It trades about 0.18 of its potential returns per unit of risk. Mainstay Sp 500 is currently generating about -0.11 per unit of risk. If you would invest 1,121 in T Rowe Price on December 1, 2024 and sell it today you would earn a total of 10.00 from holding T Rowe Price or generate 0.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
T Rowe Price vs. Mainstay Sp 500
Performance |
| Timeline |
| T Rowe Price |
| Mainstay Sp 500 |
T Rowe and Mainstay Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with T Rowe and Mainstay
The main advantage of trading using opposite T Rowe and Mainstay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if T Rowe position performs unexpectedly, Mainstay 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 will offset losses from the drop in Mainstay's long position.| T Rowe vs. Wells Fargo Advantage | T Rowe vs. First Eagle Gold | T Rowe vs. Investment Managers Series | T Rowe vs. Franklin Gold Precious |
| Mainstay vs. Transamerica Short Term Bond | Mainstay vs. Transam Short Term Bond | Mainstay vs. T Rowe Price | Mainstay vs. Catholic Responsible Investments |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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