Correlation Between Transamerica Large and Mainstay Mon
Can any of the company-specific risk be diversified away by investing in both Transamerica Large and Mainstay Mon 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 Large and Mainstay Mon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transamerica Large Cap and Mainstay Mon Stock, you can compare the effects of market volatilities on Transamerica Large and Mainstay Mon 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 Large with a short position of Mainstay Mon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transamerica Large and Mainstay Mon.
Diversification Opportunities for Transamerica Large and Mainstay Mon
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Transamerica and Mainstay is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Transamerica Large Cap and Mainstay Mon Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Mon Stock and Transamerica Large 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 Large Cap are associated (or correlated) with Mainstay Mon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Mon Stock has no effect on the direction of Transamerica Large i.e., Transamerica Large and Mainstay Mon go up and down completely randomly.
Pair Corralation between Transamerica Large and Mainstay Mon
Assuming the 90 days horizon Transamerica Large is expected to generate 1.22 times less return on investment than Mainstay Mon. But when comparing it to its historical volatility, Transamerica Large Cap is 1.17 times less risky than Mainstay Mon. It trades about 0.11 of its potential returns per unit of risk. Mainstay Mon Stock is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 3,654 in Mainstay Mon Stock on September 13, 2024 and sell it today you would earn a total of 402.00 from holding Mainstay Mon Stock or generate 11.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Transamerica Large Cap vs. Mainstay Mon Stock
Performance |
| Timeline |
| Transamerica Large Cap |
| Mainstay Mon Stock |
Transamerica Large and Mainstay Mon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transamerica Large and Mainstay Mon
The main advantage of trading using opposite Transamerica Large and Mainstay Mon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transamerica Large position performs unexpectedly, Mainstay Mon 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 Mon will offset losses from the drop in Mainstay Mon's long position.| Transamerica Large vs. Western Asset Municipal | Transamerica Large vs. Ab Value Fund | Transamerica Large vs. Acm Dynamic Opportunity | Transamerica Large vs. Qs Large Cap |
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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.
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