Correlation Between Calvert Large and Mainstay Large

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

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

Diversification Opportunities for Calvert Large and Mainstay Large

0.03

Correlation Coefficient

Calvert Large  Mainstay Large

Significant diversification

The 3 months correlation between Calvert and Mainstay is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Large Cap and Mainstay Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Large Cap and Calvert Large 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 Calvert Large Cap are associated (or correlated) with Mainstay Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Large Cap has no effect on the direction of Calvert Large i.e., Calvert Large and Mainstay Large go up and down completely randomly.

Pair Corralation between Calvert Large and Mainstay Large

Assuming the 90 days horizon Calvert Large Cap is expected to under-perform the Mainstay Large. But the mutual fund apears to be less risky and, when comparing its historical volatility, Calvert Large Cap is 6.28 times less risky than Mainstay Large. The mutual fund trades about -0.24 of its potential returns per unit of risk. The Mainstay Large Cap is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  447.00  in Mainstay Large Cap on October 9, 2024 and sell it today you would lose (4.00) from holding Mainstay Large Cap or give up 0.89% of portfolio value over 90 days.

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

Calvert Large Cap  vs.  Mainstay Large Cap

Calvert Large Cap

Risk-Adjusted Performance

0 of 100

Very Weak

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

Mainstay Large Cap

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mainstay Large Cap 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 fundamental drivers remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Calvert Large and Mainstay Large

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

The idea behind Calvert Large Cap and Mainstay Large Cap 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.