Correlation Between Champlain Small and Mainstay Mackay

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

By analyzing existing cross correlation between Champlain Small and Mainstay Mackay Tax, you can compare the effects of market volatilities on Champlain Small 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 Champlain Small with a short position of Mainstay Mackay. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champlain Small and Mainstay Mackay.

Diversification Opportunities for Champlain Small and Mainstay Mackay

0.63

Correlation Coefficient

Champlain Small  Mainstay Mackay

Poor diversification

The 3 months correlation between Champlain and Mainstay is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Champlain Small and Mainstay Mackay Tax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Mackay Tax and Champlain Small 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 Champlain Small 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 Tax has no effect on the direction of Champlain Small i.e., Champlain Small and Mainstay Mackay go up and down completely randomly.

Pair Corralation between Champlain Small and Mainstay Mackay

Assuming the 90 days horizon Champlain Small is expected to under-perform the Mainstay Mackay. In addition to that, Champlain Small is 6.52 times more volatile than Mainstay Mackay Tax. It trades about -0.15 of its total potential returns per unit of risk. Mainstay Mackay Tax is currently generating about -0.05 per unit of volatility. If you would invest  944.00  in Mainstay Mackay Tax on December 5, 2024 and sell it today you would lose (7.00) from holding Mainstay Mackay Tax or give up 0.74% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Champlain Small  vs.  Mainstay Mackay Tax

Champlain Small

Risk-Adjusted Performance

Very Weak

Over the last 90 days Champlain Small has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Mainstay Mackay Tax

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Champlain Small and Mainstay Mackay

The main advantage of trading using opposite Champlain Small and Mainstay Mackay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champlain Small 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.

The idea behind Champlain Small and Mainstay Mackay Tax 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 Global Correlations module to find global opportunities by holding instruments from different markets.