Correlation Between Gmo Trust and Mainstay Convertible
Can any of the company-specific risk be diversified away by investing in both Gmo Trust and Mainstay Convertible 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 Gmo Trust and Mainstay Convertible into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gmo Trust and Mainstay Vertible Fund, you can compare the effects of market volatilities on Gmo Trust and Mainstay Convertible 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 Gmo Trust with a short position of Mainstay Convertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gmo Trust and Mainstay Convertible.
Diversification Opportunities for Gmo Trust and Mainstay Convertible
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gmo and Mainstay is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Gmo Trust and Mainstay Vertible Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Convertible and Gmo Trust 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 Gmo Trust are associated (or correlated) with Mainstay Convertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Convertible has no effect on the direction of Gmo Trust i.e., Gmo Trust and Mainstay Convertible go up and down completely randomly.
Pair Corralation between Gmo Trust and Mainstay Convertible
Assuming the 90 days horizon Gmo Trust is expected to under-perform the Mainstay Convertible. In addition to that, Gmo Trust is 1.6 times more volatile than Mainstay Vertible Fund. It trades about -0.16 of its total potential returns per unit of risk. Mainstay Vertible Fund is currently generating about -0.23 per unit of volatility. If you would invest 1,907 in Mainstay Vertible Fund on October 15, 2024 and sell it today you would lose (43.00) from holding Mainstay Vertible Fund or give up 2.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gmo Trust vs. Mainstay Vertible Fund
Performance |
| Timeline |
| Gmo Trust |
| Mainstay Convertible |
Gmo Trust and Mainstay Convertible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gmo Trust and Mainstay Convertible
The main advantage of trading using opposite Gmo Trust and Mainstay Convertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gmo Trust position performs unexpectedly, Mainstay Convertible 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 Convertible will offset losses from the drop in Mainstay Convertible's long position.| Gmo Trust vs. Mainstay Vertible Fund | Gmo Trust vs. Lord Abbett Vertible | Gmo Trust vs. Allianzgi Convertible Income | Gmo Trust vs. Virtus Convertible |
| Mainstay Convertible vs. Mainstay High Yield | Mainstay Convertible vs. Mainstay Income Builder | Mainstay Convertible vs. Mainstay Sp 500 | Mainstay Convertible 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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