Correlation Between Intermediate Term and Mainstay High
Can any of the company-specific risk be diversified away by investing in both Intermediate Term 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 Intermediate Term and Mainstay High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intermediate Term Tax Free Bond and Mainstay High Yield, you can compare the effects of market volatilities on Intermediate Term 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 Intermediate Term with a short position of Mainstay High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intermediate Term and Mainstay High.
Diversification Opportunities for Intermediate Term and Mainstay High
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Intermediate and Mainstay is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Intermediate Term Tax Free Bon 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 Intermediate Term 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 Intermediate Term Tax Free Bond 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 Intermediate Term i.e., Intermediate Term and Mainstay High go up and down completely randomly.
Pair Corralation between Intermediate Term and Mainstay High
Assuming the 90 days horizon Intermediate Term is expected to generate 1.66 times less return on investment than Mainstay High. But when comparing it to its historical volatility, Intermediate Term Tax Free Bond is 1.63 times less risky than Mainstay High. It trades about 0.08 of its potential returns per unit of risk. Mainstay High Yield is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,065 in Mainstay High Yield on September 13, 2024 and sell it today you would earn a total of 143.00 from holding Mainstay High Yield or generate 13.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intermediate Term Tax Free Bon vs. Mainstay High Yield
Performance |
| Timeline |
| Intermediate Term Tax |
| Mainstay High Yield |
Intermediate Term and Mainstay High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intermediate Term and Mainstay High
The main advantage of trading using opposite Intermediate Term and Mainstay High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intermediate Term 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.| Intermediate Term vs. Us High Relative | Intermediate Term vs. Morningstar Aggressive Growth | Intermediate Term vs. Fa 529 Aggressive | Intermediate Term vs. Intal High Relative |
| Mainstay High vs. Mainstay High Yield | Mainstay High vs. Mainstay Tax Free | Mainstay High vs. Mainstay Income Builder | Mainstay High 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |