Correlation Between Vanguard Intermediate and Mainstay Mackay
Can any of the company-specific risk be diversified away by investing in both Vanguard Intermediate and Mainstay Mackay 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 Intermediate and Mainstay Mackay into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Intermediate Term Tax Exempt and Mainstay Mackay Strategic, you can compare the effects of market volatilities on Vanguard Intermediate and Mainstay Mackay 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 Intermediate with a short position of Mainstay Mackay. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Intermediate and Mainstay Mackay.
Diversification Opportunities for Vanguard Intermediate and Mainstay Mackay
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 Intermediate Term Tax and Mainstay Mackay Strategic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Mackay Strategic and Vanguard Intermediate 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 Intermediate Term Tax Exempt are associated (or correlated) with Mainstay Mackay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Mackay Strategic has no effect on the direction of Vanguard Intermediate i.e., Vanguard Intermediate and Mainstay Mackay go up and down completely randomly.
Pair Corralation between Vanguard Intermediate and Mainstay Mackay
Assuming the 90 days horizon Vanguard Intermediate Term Tax Exempt is expected to generate 1.05 times more return on investment than Mainstay Mackay. However, Vanguard Intermediate is 1.05 times more volatile than Mainstay Mackay Strategic. It trades about 0.52 of its potential returns per unit of risk. Mainstay Mackay Strategic is currently generating about 0.43 per unit of risk. If you would invest 1,363 in Vanguard Intermediate Term Tax Exempt on September 12, 2024 and sell it today you would earn a total of 14.00 from holding Vanguard Intermediate Term Tax Exempt or generate 1.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Vanguard Intermediate Term Tax vs. Mainstay Mackay Strategic
Performance |
| Timeline |
| Vanguard Intermediate |
| Mainstay Mackay Strategic |
Vanguard Intermediate and Mainstay Mackay Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Intermediate and Mainstay Mackay
The main advantage of trading using opposite Vanguard Intermediate and Mainstay Mackay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Intermediate position performs unexpectedly, Mainstay Mackay 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 Mackay will offset losses from the drop in Mainstay Mackay's long position.| Vanguard Intermediate vs. Vanguard Intermediate Term Tax Exempt | Vanguard Intermediate vs. Tax Exempt Bond | Vanguard Intermediate vs. Tax Exempt Bond | Vanguard Intermediate vs. Tax Exempt Bond |
| Mainstay Mackay vs. Vanguard Intermediate Term Tax Exempt | Mainstay Mackay vs. Vanguard Intermediate Term Tax Exempt | Mainstay Mackay vs. Tax Exempt Bond | Mainstay Mackay vs. Tax Exempt Bond |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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