Correlation Between Us Small and Mainstay Income
Can any of the company-specific risk be diversified away by investing in both Us Small and Mainstay Income 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 Us Small and Mainstay Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Us Small Cap and Mainstay Income Builder, you can compare the effects of market volatilities on Us Small and Mainstay Income 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 Us Small with a short position of Mainstay Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Us Small and Mainstay Income.
Diversification Opportunities for Us Small and Mainstay Income
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between RLESX and Mainstay is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Us Small Cap and Mainstay Income Builder in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Income Builder and Us Small 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 Us Small Cap are associated (or correlated) with Mainstay Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Income Builder has no effect on the direction of Us Small i.e., Us Small and Mainstay Income go up and down completely randomly.
Pair Corralation between Us Small and Mainstay Income
Assuming the 90 days horizon Us Small Cap is expected to under-perform the Mainstay Income. In addition to that, Us Small is 2.29 times more volatile than Mainstay Income Builder. It trades about -0.25 of its total potential returns per unit of risk. Mainstay Income Builder is currently generating about 0.2 per unit of volatility. If you would invest 2,088 in Mainstay Income Builder on November 27, 2024 and sell it today you would earn a total of 36.00 from holding Mainstay Income Builder or generate 1.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Us Small Cap vs. Mainstay Income Builder
Performance |
| Timeline |
| Us Small Cap |
| Mainstay Income Builder |
Us Small and Mainstay Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Us Small and Mainstay Income
The main advantage of trading using opposite Us Small and Mainstay Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Us Small position performs unexpectedly, Mainstay Income 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 Income will offset losses from the drop in Mainstay Income's long position.| Us Small vs. Goldman Sachs High | Us Small vs. Access Flex High | Us Small vs. Barings High Yield | Us Small vs. Transamerica High Yield |
| Mainstay Income vs. Jpmorgan Large Cap | Mainstay Income vs. Lord Abbett Affiliated | Mainstay Income vs. Neiman Large Cap | Mainstay Income vs. Ab 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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