Correlation Between Small Cap and Mainstay Moderate
Can any of the company-specific risk be diversified away by investing in both Small Cap 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 Small Cap and Mainstay Moderate 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 Moderate Allocation, you can compare the effects of market volatilities on Small Cap 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 Small Cap with a short position of Mainstay Moderate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Small Cap and Mainstay Moderate.
Diversification Opportunities for Small Cap and Mainstay Moderate
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 Moderate Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Moderate 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 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 Small Cap i.e., Small Cap and Mainstay Moderate go up and down completely randomly.
Pair Corralation between Small Cap and Mainstay Moderate
Assuming the 90 days horizon Small Cap Stock is expected to generate 2.72 times more return on investment than Mainstay Moderate. However, Small Cap is 2.72 times more volatile than Mainstay Moderate Allocation. It trades about 0.09 of its potential returns per unit of risk. Mainstay Moderate Allocation is currently generating about 0.13 per unit of risk. If you would invest 1,319 in Small Cap Stock on September 2, 2024 and sell it today you would earn a total of 210.00 from holding Small Cap Stock or generate 15.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Small Cap Stock vs. Mainstay Moderate Allocation
Performance |
| Timeline |
| Small Cap Stock |
| Mainstay Moderate |
Small Cap and Mainstay Moderate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Small Cap and Mainstay Moderate
The main advantage of trading using opposite Small Cap and Mainstay Moderate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Small Cap 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.| Small Cap vs. Calamos Global Equity | Small Cap vs. Cutler Equity | Small Cap vs. Us Vector Equity | Small Cap vs. Small Cap Equity |
| Mainstay Moderate vs. Mainstay High Yield | Mainstay Moderate vs. Mainstay Tax Free | Mainstay Moderate vs. Mainstay Income Builder | Mainstay Moderate 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |