Correlation Between Short Oil and Mainstay International
Can any of the company-specific risk be diversified away by investing in both Short Oil and Mainstay International 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 Short Oil and Mainstay International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Short Oil Gas and Mainstay International Opportunities, you can compare the effects of market volatilities on Short Oil and Mainstay International 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 Short Oil with a short position of Mainstay International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Short Oil and Mainstay International.
Diversification Opportunities for Short Oil and Mainstay International
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Short and Mainstay is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Short Oil Gas and Mainstay International Opportu in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay International and Short Oil 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 Short Oil Gas are associated (or correlated) with Mainstay International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay International has no effect on the direction of Short Oil i.e., Short Oil and Mainstay International go up and down completely randomly.
Pair Corralation between Short Oil and Mainstay International
Assuming the 90 days horizon Short Oil is expected to generate 5.95 times less return on investment than Mainstay International. In addition to that, Short Oil is 1.67 times more volatile than Mainstay International Opportunities. It trades about 0.01 of its total potential returns per unit of risk. Mainstay International Opportunities is currently generating about 0.06 per unit of volatility. If you would invest 640.00 in Mainstay International Opportunities on September 14, 2024 and sell it today you would earn a total of 146.00 from holding Mainstay International Opportunities or generate 22.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Short Oil Gas vs. Mainstay International Opportu
Performance |
| Timeline |
| Short Oil Gas |
| Mainstay International |
Short Oil and Mainstay International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Short Oil and Mainstay International
The main advantage of trading using opposite Short Oil and Mainstay International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Short Oil position performs unexpectedly, Mainstay International 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 International will offset losses from the drop in Mainstay International's long position.| Short Oil vs. Americafirst Large Cap | Short Oil vs. Avantis Large Cap | Short Oil vs. Jhancock Disciplined Value | Short Oil vs. M Large Cap |
| Mainstay International vs. Oil Gas Ultrasector | Mainstay International vs. World Energy Fund | Mainstay International vs. Short Oil Gas | Mainstay International vs. Clearbridge Energy Mlp |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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