Correlation Between Western Asset and Mainstay Convertible
Can any of the company-specific risk be diversified away by investing in both Western Asset and Mainstay Convertible 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 Convertible into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset Diversified and Mainstay Vertible Fund, you can compare the effects of market volatilities on Western Asset and Mainstay Convertible 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 Convertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Mainstay Convertible.
Diversification Opportunities for Western Asset and Mainstay Convertible
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Western and Mainstay is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Diversified and Mainstay Vertible Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Convertible 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 Diversified are associated (or correlated) with Mainstay Convertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Convertible has no effect on the direction of Western Asset i.e., Western Asset and Mainstay Convertible go up and down completely randomly.
Pair Corralation between Western Asset and Mainstay Convertible
Assuming the 90 days horizon Western Asset is expected to generate 9.53 times less return on investment than Mainstay Convertible. But when comparing it to its historical volatility, Western Asset Diversified is 1.56 times less risky than Mainstay Convertible. It trades about 0.07 of its potential returns per unit of risk. Mainstay Vertible Fund is currently generating about 0.42 of returns per unit of risk over similar time horizon. If you would invest 1,936 in Mainstay Vertible Fund on September 4, 2024 and sell it today you would earn a total of 74.00 from holding Mainstay Vertible Fund or generate 3.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Diversified vs. Mainstay Vertible Fund
Performance |
| Timeline |
| Western Asset Diversified |
| Mainstay Convertible |
Western Asset and Mainstay Convertible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Mainstay Convertible
The main advantage of trading using opposite Western Asset and Mainstay Convertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Mainstay Convertible 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 Convertible will offset losses from the drop in Mainstay Convertible's long position.| Western Asset vs. Dreyfusstandish Global Fixed | Western Asset vs. Franklin Mutual Global | Western Asset vs. Commonwealth Global Fund | Western Asset vs. Scharf Global Opportunity |
| Mainstay Convertible vs. Mainstay High Yield | Mainstay Convertible vs. Mainstay Tax Free | Mainstay Convertible vs. Mainstay Income Builder | Mainstay Convertible 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 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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