Correlation Between Rational Special and Mainstay Convertible
Can any of the company-specific risk be diversified away by investing in both Rational Special 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 Rational Special and Mainstay Convertible into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rational Special Situations and Mainstay Vertible Fund, you can compare the effects of market volatilities on Rational Special 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 Rational Special with a short position of Mainstay Convertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rational Special and Mainstay Convertible.
Diversification Opportunities for Rational Special and Mainstay Convertible
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Rational and Mainstay is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Rational Special Situations and Mainstay Vertible Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Convertible and Rational Special 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 Rational Special Situations 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 Rational Special i.e., Rational Special and Mainstay Convertible go up and down completely randomly.
Pair Corralation between Rational Special and Mainstay Convertible
Assuming the 90 days horizon Rational Special is expected to generate 9.7 times less return on investment than Mainstay Convertible. But when comparing it to its historical volatility, Rational Special Situations is 2.56 times less risky than Mainstay Convertible. It trades about 0.11 of its potential returns per unit of risk. Mainstay Vertible Fund is currently generating about 0.42 of returns per unit of risk over similar time horizon. If you would invest 1,942 in Mainstay Vertible Fund on September 3, 2024 and sell it today you would earn a total of 74.00 from holding Mainstay Vertible Fund or generate 3.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rational Special Situations vs. Mainstay Vertible Fund
Performance |
| Timeline |
| Rational Special Sit |
| Mainstay Convertible |
Rational Special and Mainstay Convertible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rational Special and Mainstay Convertible
The main advantage of trading using opposite Rational Special and Mainstay Convertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rational Special 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.| Rational Special vs. Pimco Income Fund | Rational Special vs. Pimco Income Fund | Rational Special vs. Pimco Income Fund | Rational Special vs. Pimco Income Fund |
| Mainstay Convertible vs. Franklin Vertible Securities | Mainstay Convertible vs. Mainstay Floating Rate | Mainstay Convertible vs. Calamos Vertible Fund | Mainstay Convertible vs. Mainstay High Yield |
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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