Correlation Between City National and Mainstay Conservative
Can any of the company-specific risk be diversified away by investing in both City National and Mainstay Conservative 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 City National and Mainstay Conservative into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between City National Rochdale and Mainstay Conservative Etf, you can compare the effects of market volatilities on City National and Mainstay Conservative 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 City National with a short position of Mainstay Conservative. Check out your portfolio center. Please also check ongoing floating volatility patterns of City National and Mainstay Conservative.
Diversification Opportunities for City National and Mainstay Conservative
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between City and Mainstay is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding City National Rochdale and Mainstay Conservative Etf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Conservative Etf and City National 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 City National Rochdale are associated (or correlated) with Mainstay Conservative. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Conservative Etf has no effect on the direction of City National i.e., City National and Mainstay Conservative go up and down completely randomly.
Pair Corralation between City National and Mainstay Conservative
Assuming the 90 days horizon City National is expected to generate 10.04 times less return on investment than Mainstay Conservative. But when comparing it to its historical volatility, City National Rochdale is 2.7 times less risky than Mainstay Conservative. It trades about 0.05 of its potential returns per unit of risk. Mainstay Conservative Etf is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 1,111 in Mainstay Conservative Etf on September 13, 2024 and sell it today you would earn a total of 12.00 from holding Mainstay Conservative Etf or generate 1.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
City National Rochdale vs. Mainstay Conservative Etf
Performance |
| Timeline |
| City National Rochdale |
| Mainstay Conservative Etf |
City National and Mainstay Conservative Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with City National and Mainstay Conservative
The main advantage of trading using opposite City National and Mainstay Conservative positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if City National position performs unexpectedly, Mainstay Conservative 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 Conservative will offset losses from the drop in Mainstay Conservative's long position.| City National vs. Deutsche Real Estate | City National vs. Short Real Estate | City National vs. Sa Real Estate | City National vs. Jhancock Real Estate |
| Mainstay Conservative vs. Mainstay High Yield | Mainstay Conservative vs. Mainstay Tax Free | Mainstay Conservative vs. Mainstay Income Builder | Mainstay Conservative 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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