Correlation Between T Rowe and Mainstay Fiera
Can any of the company-specific risk be diversified away by investing in both T Rowe and Mainstay Fiera 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 Fiera 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 Fiera Smid, you can compare the effects of market volatilities on T Rowe and Mainstay Fiera 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 Fiera. Check out your portfolio center. Please also check ongoing floating volatility patterns of T Rowe and Mainstay Fiera.
Diversification Opportunities for T Rowe and Mainstay Fiera
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between RRMGX and Mainstay is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding T Rowe Price and Mainstay Fiera Smid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Fiera Smid 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 Fiera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Fiera Smid has no effect on the direction of T Rowe i.e., T Rowe and Mainstay Fiera go up and down completely randomly.
Pair Corralation between T Rowe and Mainstay Fiera
Assuming the 90 days horizon T Rowe is expected to generate 1.66 times less return on investment than Mainstay Fiera. But when comparing it to its historical volatility, T Rowe Price is 1.22 times less risky than Mainstay Fiera. It trades about 0.06 of its potential returns per unit of risk. Mainstay Fiera Smid is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,522 in Mainstay Fiera Smid on August 24, 2024 and sell it today you would earn a total of 332.00 from holding Mainstay Fiera Smid or generate 21.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.6% |
| Values | Daily Returns |
T Rowe Price vs. Mainstay Fiera Smid
Performance |
| Timeline |
| T Rowe Price |
| Mainstay Fiera Smid |
T Rowe and Mainstay Fiera Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with T Rowe and Mainstay Fiera
The main advantage of trading using opposite T Rowe and Mainstay Fiera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if T Rowe position performs unexpectedly, Mainstay Fiera 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 Fiera will offset losses from the drop in Mainstay Fiera's long position.The idea behind T Rowe Price and Mainstay Fiera Smid pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Mainstay Fiera vs. T Rowe Price | Mainstay Fiera vs. Oklahoma Municipal Fund | Mainstay Fiera vs. Ab Impact Municipal | Mainstay Fiera vs. T Rowe Price |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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