Correlation Between Value Fund and Mainstay Moderate
Can any of the company-specific risk be diversified away by investing in both Value Fund and Mainstay Moderate 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 Value Fund and Mainstay Moderate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Value Fund Investor and Mainstay Moderate Allocation, you can compare the effects of market volatilities on Value Fund and Mainstay Moderate 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 Value Fund with a short position of Mainstay Moderate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Value Fund and Mainstay Moderate.
Diversification Opportunities for Value Fund and Mainstay Moderate
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Value and Mainstay is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Value Fund Investor and Mainstay Moderate Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Moderate and Value Fund 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 Value Fund Investor are associated (or correlated) with Mainstay Moderate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Moderate has no effect on the direction of Value Fund i.e., Value Fund and Mainstay Moderate go up and down completely randomly.
Pair Corralation between Value Fund and Mainstay Moderate
Assuming the 90 days horizon Value Fund Investor is expected to under-perform the Mainstay Moderate. In addition to that, Value Fund is 1.28 times more volatile than Mainstay Moderate Allocation. It trades about -0.05 of its total potential returns per unit of risk. Mainstay Moderate Allocation is currently generating about 0.08 per unit of volatility. If you would invest 1,482 in Mainstay Moderate Allocation on September 12, 2024 and sell it today you would earn a total of 9.00 from holding Mainstay Moderate Allocation or generate 0.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Value Fund Investor vs. Mainstay Moderate Allocation
Performance |
| Timeline |
| Value Fund Investor |
| Mainstay Moderate |
Value Fund and Mainstay Moderate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Value Fund and Mainstay Moderate
The main advantage of trading using opposite Value Fund and Mainstay Moderate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Value Fund position performs unexpectedly, Mainstay Moderate 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 Moderate will offset losses from the drop in Mainstay Moderate's long position.| Value Fund vs. International Growth Fund | Value Fund vs. Growth Fund Investor | Value Fund vs. Equity Income Fund | Value Fund vs. Ultra Fund Investor |
| Mainstay Moderate vs. Strategic Allocation Servative | Mainstay Moderate vs. Strategic Allocation Aggressive | Mainstay Moderate vs. Value Fund Investor | Mainstay Moderate vs. International Growth Fund |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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