Correlation Between Pear Tree and Mainstay High
Can any of the company-specific risk be diversified away by investing in both Pear Tree and Mainstay High 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 Pear Tree and Mainstay High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pear Tree Polaris and Mainstay High Yield, you can compare the effects of market volatilities on Pear Tree and Mainstay High 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 Pear Tree with a short position of Mainstay High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pear Tree and Mainstay High.
Diversification Opportunities for Pear Tree and Mainstay High
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pear and Mainstay is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Pear Tree Polaris and Mainstay High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay High Yield and Pear Tree 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 Pear Tree Polaris are associated (or correlated) with Mainstay High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay High Yield has no effect on the direction of Pear Tree i.e., Pear Tree and Mainstay High go up and down completely randomly.
Pair Corralation between Pear Tree and Mainstay High
Assuming the 90 days horizon Pear Tree Polaris is expected to generate 3.18 times more return on investment than Mainstay High. However, Pear Tree is 3.18 times more volatile than Mainstay High Yield. It trades about 0.06 of its potential returns per unit of risk. Mainstay High Yield is currently generating about 0.14 per unit of risk. If you would invest 1,937 in Pear Tree Polaris on September 2, 2024 and sell it today you would earn a total of 431.00 from holding Pear Tree Polaris or generate 22.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pear Tree Polaris vs. Mainstay High Yield
Performance |
| Timeline |
| Pear Tree Polaris |
| Mainstay High Yield |
Pear Tree and Mainstay High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pear Tree and Mainstay High
The main advantage of trading using opposite Pear Tree and Mainstay High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pear Tree position performs unexpectedly, Mainstay High 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 High will offset losses from the drop in Mainstay High's long position.| Pear Tree vs. Loomis Sayles Growth | Pear Tree vs. Edgewood Growth Fund | Pear Tree vs. Nuance Mid Cap | Pear Tree vs. Parnassus Mid Cap |
| Mainstay High vs. Ultra Short Fixed Income | Mainstay High vs. Franklin Federal Limited Term | Mainstay High vs. Aqr Sustainable Long Short | Mainstay High vs. Quantitative Longshort Equity |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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