Correlation Between Western Asset and Mainstay Mackay
Can any of the company-specific risk be diversified away by investing in both Western Asset 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 Western Asset and Mainstay Mackay 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 Mackay High, you can compare the effects of market volatilities on Western Asset 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 Western Asset with a short position of Mainstay Mackay. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Mainstay Mackay.
Diversification Opportunities for Western Asset and Mainstay Mackay
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Western and Mainstay is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset High and Mainstay Mackay High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Mackay High 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 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 High has no effect on the direction of Western Asset i.e., Western Asset and Mainstay Mackay go up and down completely randomly.
Pair Corralation between Western Asset and Mainstay Mackay
Assuming the 90 days horizon Western Asset is expected to generate 1.17 times less return on investment than Mainstay Mackay. But when comparing it to its historical volatility, Western Asset High is 2.38 times less risky than Mainstay Mackay. It trades about 0.13 of its potential returns per unit of risk. Mainstay Mackay High is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,199 in Mainstay Mackay High on September 13, 2024 and sell it today you would earn a total of 12.00 from holding Mainstay Mackay High or generate 1.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.67% |
| Values | Daily Returns |
Western Asset High vs. Mainstay Mackay High
Performance |
| Timeline |
| Western Asset High |
| Mainstay Mackay High |
Western Asset and Mainstay Mackay Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Mainstay Mackay
The main advantage of trading using opposite Western Asset and Mainstay Mackay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset 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.| Western Asset vs. Guggenheim Risk Managed | Western Asset vs. Simt Real Estate | Western Asset vs. Redwood Real Estate | Western Asset vs. Vy Clarion Real |
| Mainstay Mackay vs. Mainstay Tax Free | Mainstay Mackay vs. Mainstay Large Cap | Mainstay Mackay vs. Mainstay Large Cap | Mainstay Mackay vs. Mainstay Large Cap |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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