Correlation Between Vanguard 500 and Mainstay Defined
Can any of the company-specific risk be diversified away by investing in both Vanguard 500 and Mainstay Defined 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 Vanguard 500 and Mainstay Defined into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard 500 Index and Mainstay Defined Term, you can compare the effects of market volatilities on Vanguard 500 and Mainstay Defined 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 Vanguard 500 with a short position of Mainstay Defined. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard 500 and Mainstay Defined.
Diversification Opportunities for Vanguard 500 and Mainstay Defined
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Vanguard and Mainstay is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard 500 Index and Mainstay Defined Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Defined Term and Vanguard 500 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 Vanguard 500 Index are associated (or correlated) with Mainstay Defined. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Defined Term has no effect on the direction of Vanguard 500 i.e., Vanguard 500 and Mainstay Defined go up and down completely randomly.
Pair Corralation between Vanguard 500 and Mainstay Defined
Assuming the 90 days horizon Vanguard 500 is expected to generate 1.36 times less return on investment than Mainstay Defined. In addition to that, Vanguard 500 is 2.71 times more volatile than Mainstay Defined Term. It trades about 0.1 of its total potential returns per unit of risk. Mainstay Defined Term is currently generating about 0.36 per unit of volatility. If you would invest 1,686 in Mainstay Defined Term on September 13, 2024 and sell it today you would earn a total of 23.00 from holding Mainstay Defined Term or generate 1.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard 500 Index vs. Mainstay Defined Term
Performance |
| Timeline |
| Vanguard 500 Index |
| Mainstay Defined Term |
Vanguard 500 and Mainstay Defined Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard 500 and Mainstay Defined
The main advantage of trading using opposite Vanguard 500 and Mainstay Defined positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard 500 position performs unexpectedly, Mainstay Defined 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 Defined will offset losses from the drop in Mainstay Defined's long position.| Vanguard 500 vs. Vanguard Total International | Vanguard 500 vs. Vanguard Total Bond | Vanguard 500 vs. Vanguard Small Cap Index | Vanguard 500 vs. Vanguard Reit Index |
| Mainstay Defined vs. World Energy Fund | Mainstay Defined vs. Alpsalerian Energy Infrastructure | Mainstay Defined vs. Oil Gas Ultrasector | Mainstay Defined vs. Fidelity Advisor Energy |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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