Correlation Between Income Growth and Mainstay Pinestone

Can any of the company-specific risk be diversified away by investing in both Income Growth and Mainstay Pinestone 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 Income Growth and Mainstay Pinestone into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Income Growth Fund and Mainstay Pinestone International, you can compare the effects of market volatilities on Income Growth and Mainstay Pinestone 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 Income Growth with a short position of Mainstay Pinestone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Income Growth and Mainstay Pinestone.

Diversification Opportunities for Income Growth and Mainstay Pinestone

-0.07

Correlation Coefficient

Income Growth  Mainstay Pinestone

Good diversification

The 3 months correlation between Income and Mainstay is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Income Growth Fund and Mainstay Pinestone Internation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Pinestone and Income Growth 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 Income Growth Fund are associated (or correlated) with Mainstay Pinestone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Pinestone has no effect on the direction of Income Growth i.e., Income Growth and Mainstay Pinestone go up and down completely randomly.

Pair Corralation between Income Growth and Mainstay Pinestone

Assuming the 90 days horizon Income Growth is expected to generate 3.19 times less return on investment than Mainstay Pinestone. But when comparing it to its historical volatility, Income Growth Fund is 2.09 times less risky than Mainstay Pinestone. It trades about 0.04 of its potential returns per unit of risk. Mainstay Pinestone International is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  1,176  in Mainstay Pinestone International on October 5, 2024 and sell it today you would earn a total of  430.00  from holding Mainstay Pinestone International or generate 36.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	71.79%
Values	Daily Returns

Income Growth Fund  vs.  Mainstay Pinestone Internation

Income Growth

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Income Growth Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Income Growth is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Mainstay Pinestone

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mainstay Pinestone International has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Income Growth and Mainstay Pinestone

The main advantage of trading using opposite Income Growth and Mainstay Pinestone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Income Growth position performs unexpectedly, Mainstay Pinestone 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 Pinestone will offset losses from the drop in Mainstay Pinestone's long position.

The idea behind Income Growth Fund and Mainstay Pinestone International pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.