Correlation Between Sit Government and Mainstay High
Can any of the company-specific risk be diversified away by investing in both Sit Government and Mainstay High 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 Sit Government and Mainstay High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sit Government Securities and Mainstay High Yield, you can compare the effects of market volatilities on Sit Government and Mainstay High 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 Sit Government with a short position of Mainstay High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sit Government and Mainstay High.
Diversification Opportunities for Sit Government and Mainstay High
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sit and Mainstay is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Sit Government Securities and Mainstay High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay High Yield and Sit 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 Sit Government Securities are associated (or correlated) with Mainstay High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay High Yield has no effect on the direction of Sit Government i.e., Sit Government and Mainstay High go up and down completely randomly.
Pair Corralation between Sit Government and Mainstay High
Assuming the 90 days horizon Sit Government is expected to generate 1.56 times less return on investment than Mainstay High. In addition to that, Sit Government is 1.32 times more volatile than Mainstay High Yield. It trades about 0.1 of its total potential returns per unit of risk. Mainstay High Yield is currently generating about 0.21 per unit of volatility. If you would invest 474.00 in Mainstay High Yield on September 15, 2024 and sell it today you would earn a total of 51.00 from holding Mainstay High Yield or generate 10.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.63% |
| Values | Daily Returns |
Sit Government Securities vs. Mainstay High Yield
Performance |
| Timeline |
| Sit Government Securities |
| Mainstay High Yield |
Sit Government and Mainstay High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sit Government and Mainstay High
The main advantage of trading using opposite Sit Government and Mainstay High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sit Government position performs unexpectedly, Mainstay High 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 High will offset losses from the drop in Mainstay High's long position.| Sit Government vs. Sit Small Cap | Sit Government vs. Sit Global Dividend | Sit Government vs. Sit Global Dividend | Sit Government vs. Sit Small Cap |
| Mainstay High vs. Franklin Adjustable Government | Mainstay High vs. Goldman Sachs Government | Mainstay High vs. Sit Government Securities | Mainstay High vs. Lord Abbett Government |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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