Correlation Between Western Asset and Mainstay Tax
Can any of the company-specific risk be diversified away by investing in both Western Asset and Mainstay Tax 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 Western Asset and Mainstay Tax into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset High and Mainstay Tax Free, you can compare the effects of market volatilities on Western Asset and Mainstay Tax 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 Western Asset with a short position of Mainstay Tax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Mainstay Tax.
Diversification Opportunities for Western Asset and Mainstay Tax
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Western and Mainstay is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset High and Mainstay Tax Free in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Tax Free and Western Asset 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 Western Asset High are associated (or correlated) with Mainstay Tax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Tax Free has no effect on the direction of Western Asset i.e., Western Asset and Mainstay Tax go up and down completely randomly.
Pair Corralation between Western Asset and Mainstay Tax
Assuming the 90 days horizon Western Asset is expected to generate 2.44 times less return on investment than Mainstay Tax. But when comparing it to its historical volatility, Western Asset High is 2.28 times less risky than Mainstay Tax. It trades about 0.2 of its potential returns per unit of risk. Mainstay Tax Free is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 938.00 in Mainstay Tax Free on September 2, 2024 and sell it today you would earn a total of 13.00 from holding Mainstay Tax Free or generate 1.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset High vs. Mainstay Tax Free
Performance |
| Timeline |
| Western Asset High |
| Mainstay Tax Free |
Western Asset and Mainstay Tax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Mainstay Tax
The main advantage of trading using opposite Western Asset and Mainstay Tax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Mainstay Tax 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 Tax will offset losses from the drop in Mainstay Tax's long position.| Western Asset vs. Clearbridge Aggressive Growth | Western Asset vs. Clearbridge Small Cap | Western Asset vs. Qs International Equity | Western Asset vs. Clearbridge Appreciation Fund |
| Mainstay Tax vs. Western Asset High | Mainstay Tax vs. Aqr Risk Balanced Modities | Mainstay Tax vs. T Rowe Price | Mainstay Tax vs. Artisan High Income |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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