Correlation Between Small Cap and Mainstay Cushing

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Can any of the company-specific risk be diversified away by investing in both Small Cap 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 Small Cap and Mainstay Cushing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Small Cap Stock and Mainstay Cushing Mlp, you can compare the effects of market volatilities on Small Cap 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 Small Cap with a short position of Mainstay Cushing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Small Cap and Mainstay Cushing.

Diversification Opportunities for Small Cap and Mainstay Cushing

0.87
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Small and Mainstay is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Small Cap Stock 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 Small Cap 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 Small Cap Stock 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 Small Cap i.e., Small Cap and Mainstay Cushing go up and down completely randomly.

Pair Corralation between Small Cap and Mainstay Cushing

Assuming the 90 days horizon Small Cap Stock is expected to under-perform the Mainstay Cushing. But the mutual fund apears to be less risky and, when comparing its historical volatility, Small Cap Stock is 1.31 times less risky than Mainstay Cushing. The mutual fund trades about -0.04 of its potential returns per unit of risk. The Mainstay Cushing Mlp is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  1,155  in Mainstay Cushing Mlp on September 13, 2024 and sell it today you would lose (2.00) from holding Mainstay Cushing Mlp or give up 0.17% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Small Cap Stock  vs.  Mainstay Cushing Mlp

 Performance 
       Timeline  
Small Cap Stock 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Small Cap Stock are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Small Cap may actually be approaching a critical reversion point that can send shares even higher in January 2025.
Mainstay Cushing Mlp 

Risk-Adjusted Performance

14 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Mainstay Cushing Mlp are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Mainstay Cushing may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Small Cap and Mainstay Cushing Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Small Cap and Mainstay Cushing

The main advantage of trading using opposite Small Cap and Mainstay Cushing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Small Cap 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 Small Cap Stock 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.
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.

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