Correlation Between Western Asset and Mainstay Total
Can any of the company-specific risk be diversified away by investing in both Western Asset and Mainstay Total 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 Total 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 Total Return, you can compare the effects of market volatilities on Western Asset and Mainstay Total 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 Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Mainstay Total.
Diversification Opportunities for Western Asset and Mainstay Total
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Western and Mainstay is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Diversified and Mainstay Total Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Total Return 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 Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Total Return has no effect on the direction of Western Asset i.e., Western Asset and Mainstay Total go up and down completely randomly.
Pair Corralation between Western Asset and Mainstay Total
Assuming the 90 days horizon Western Asset Diversified is expected to under-perform the Mainstay Total. But the mutual fund apears to be less risky and, when comparing its historical volatility, Western Asset Diversified is 1.32 times less risky than Mainstay Total. The mutual fund trades about -0.03 of its potential returns per unit of risk. The Mainstay Total Return is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 914.00 in Mainstay Total Return on August 28, 2024 and sell it today you would earn a total of 6.00 from holding Mainstay Total Return or generate 0.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Western Asset Diversified vs. Mainstay Total Return
Performance |
| Timeline |
| Western Asset Diversified |
| Mainstay Total Return |
Western Asset and Mainstay Total Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Mainstay Total
The main advantage of trading using opposite Western Asset and Mainstay Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Mainstay Total 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 Total will offset losses from the drop in Mainstay Total's long position.| Western Asset vs. Vanguard Total Stock | Western Asset vs. Vanguard 500 Index | Western Asset vs. Vanguard Total Stock | Western Asset vs. Vanguard Total Stock |
| Mainstay Total vs. Ep Emerging Markets | Mainstay Total vs. Shelton Emerging Markets | Mainstay Total vs. Western Asset Diversified | Mainstay Total vs. Rbc Emerging Markets |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |