Correlation Between Transamerica Capital and Mainstay Cushing
Can any of the company-specific risk be diversified away by investing in both Transamerica Capital and Mainstay Cushing 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 Transamerica Capital and Mainstay Cushing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transamerica Capital Growth and Mainstay Cushing Mlp, you can compare the effects of market volatilities on Transamerica Capital and Mainstay Cushing 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 Transamerica Capital with a short position of Mainstay Cushing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transamerica Capital and Mainstay Cushing.
Diversification Opportunities for Transamerica Capital and Mainstay Cushing
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Transamerica and Mainstay is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Transamerica Capital Growth and Mainstay Cushing Mlp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Cushing Mlp and Transamerica Capital 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 Transamerica Capital Growth are associated (or correlated) with Mainstay Cushing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Cushing Mlp has no effect on the direction of Transamerica Capital i.e., Transamerica Capital and Mainstay Cushing go up and down completely randomly.
Pair Corralation between Transamerica Capital and Mainstay Cushing
Assuming the 90 days horizon Transamerica Capital Growth is expected to generate 1.93 times more return on investment than Mainstay Cushing. However, Transamerica Capital is 1.93 times more volatile than Mainstay Cushing Mlp. It trades about 0.09 of its potential returns per unit of risk. Mainstay Cushing Mlp is currently generating about 0.13 per unit of risk. If you would invest 2,213 in Transamerica Capital Growth on September 1, 2024 and sell it today you would earn a total of 1,970 from holding Transamerica Capital Growth or generate 89.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Transamerica Capital Growth vs. Mainstay Cushing Mlp
Performance |
| Timeline |
| Transamerica Capital |
| Mainstay Cushing Mlp |
Transamerica Capital and Mainstay Cushing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transamerica Capital and Mainstay Cushing
The main advantage of trading using opposite Transamerica Capital and Mainstay Cushing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transamerica Capital position performs unexpectedly, Mainstay Cushing 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 Cushing will offset losses from the drop in Mainstay Cushing's long position.The idea behind Transamerica Capital Growth and Mainstay Cushing Mlp 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 Cushing vs. Mainstay High Yield | Mainstay Cushing vs. Mainstay Tax Free | Mainstay Cushing vs. Mainstay Income Builder | Mainstay Cushing vs. Mainstay 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |