Correlation Between Visa and Mainstay Convertible
Can any of the company-specific risk be diversified away by investing in both Visa 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 Visa and Mainstay Convertible into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Visa Class A and Mainstay Vertible Fund, you can compare the effects of market volatilities on Visa 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 Visa with a short position of Mainstay Convertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Mainstay Convertible.
Diversification Opportunities for Visa and Mainstay Convertible
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Visa and Mainstay is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Mainstay Vertible Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Convertible and Visa 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 Visa Class A 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 Visa i.e., Visa and Mainstay Convertible go up and down completely randomly.
Pair Corralation between Visa and Mainstay Convertible
Taking into account the 90-day investment horizon Visa Class A is expected to generate 2.08 times more return on investment than Mainstay Convertible. However, Visa is 2.08 times more volatile than Mainstay Vertible Fund. It trades about 0.1 of its potential returns per unit of risk. Mainstay Vertible Fund is currently generating about 0.1 per unit of risk. If you would invest 22,097 in Visa Class A on September 1, 2024 and sell it today you would earn a total of 9,411 from holding Visa Class A or generate 42.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. Mainstay Vertible Fund
Performance |
| Timeline |
| Visa Class A |
| Mainstay Convertible |
Visa and Mainstay Convertible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Mainstay Convertible
The main advantage of trading using opposite Visa and Mainstay Convertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa 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.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Mainstay Convertible vs. Franklin Vertible Securities | Mainstay Convertible vs. Mainstay Floating Rate | Mainstay Convertible vs. Calamos Vertible Fund | Mainstay Convertible vs. Mainstay High Yield |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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