Correlation Between Vanguard Total and Mainstay
Can any of the company-specific risk be diversified away by investing in both Vanguard Total and Mainstay 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 Total and Mainstay into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Total Stock and Mainstay Sp 500, you can compare the effects of market volatilities on Vanguard Total and Mainstay 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 Total with a short position of Mainstay. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Total and Mainstay.
Diversification Opportunities for Vanguard Total and Mainstay
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Vanguard and Mainstay is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Total Stock and Mainstay Sp 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Sp 500 and Vanguard Total 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 Total Stock are associated (or correlated) with Mainstay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Sp 500 has no effect on the direction of Vanguard Total i.e., Vanguard Total and Mainstay go up and down completely randomly.
Pair Corralation between Vanguard Total and Mainstay
Assuming the 90 days horizon Vanguard Total Stock is expected to generate 1.07 times more return on investment than Mainstay. However, Vanguard Total is 1.07 times more volatile than Mainstay Sp 500. It trades about 0.39 of its potential returns per unit of risk. Mainstay Sp 500 is currently generating about 0.37 per unit of risk. If you would invest 13,705 in Vanguard Total Stock on September 3, 2024 and sell it today you would earn a total of 880.00 from holding Vanguard Total Stock or generate 6.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Total Stock vs. Mainstay Sp 500
Performance |
| Timeline |
| Vanguard Total Stock |
| Mainstay Sp 500 |
Vanguard Total and Mainstay Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Total and Mainstay
The main advantage of trading using opposite Vanguard Total and Mainstay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Total position performs unexpectedly, Mainstay 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 will offset losses from the drop in Mainstay's long position.| Vanguard Total vs. T Rowe Price | Vanguard Total vs. T Rowe Price | Vanguard Total vs. T Rowe Price | Vanguard Total vs. T Rowe Price |
| Mainstay vs. Vanguard Total Stock | Mainstay vs. Vanguard 500 Index | Mainstay vs. Vanguard Total Stock | Mainstay vs. Vanguard Total Stock |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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