Correlation Between Inverse Government and Mainstay Defensive
Can any of the company-specific risk be diversified away by investing in both Inverse Government and Mainstay Defensive 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 Inverse Government and Mainstay Defensive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inverse Government Long and Mainstay Defensive Etf, you can compare the effects of market volatilities on Inverse Government and Mainstay Defensive 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 Inverse Government with a short position of Mainstay Defensive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inverse Government and Mainstay Defensive.
Diversification Opportunities for Inverse Government and Mainstay Defensive
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Inverse and Mainstay is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Inverse Government Long and Mainstay Defensive Etf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Defensive Etf and Inverse Government 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 Inverse Government Long are associated (or correlated) with Mainstay Defensive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Defensive Etf has no effect on the direction of Inverse Government i.e., Inverse Government and Mainstay Defensive go up and down completely randomly.
Pair Corralation between Inverse Government and Mainstay Defensive
If you would invest 924.00 in Mainstay Defensive Etf on September 13, 2024 and sell it today you would earn a total of 0.00 from holding Mainstay Defensive Etf or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Inverse Government Long vs. Mainstay Defensive Etf
Performance |
| Timeline |
| Inverse Government Long |
| Mainstay Defensive Etf |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Inverse Government and Mainstay Defensive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inverse Government and Mainstay Defensive
The main advantage of trading using opposite Inverse Government and Mainstay Defensive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inverse Government position performs unexpectedly, Mainstay Defensive 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 Defensive will offset losses from the drop in Mainstay Defensive's long position.| Inverse Government vs. Basic Materials Fund | Inverse Government vs. Basic Materials Fund | Inverse Government vs. Banking Fund Class | Inverse Government vs. Basic Materials Fund |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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