Correlation Between Huber Capital and Mainstay

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

By analyzing existing cross correlation between Huber Capital Diversified and Mainstay Sp 500, you can compare the effects of market volatilities on Huber Capital and Mainstay 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 Huber Capital with a short position of Mainstay. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huber Capital and Mainstay.

Diversification Opportunities for Huber Capital and Mainstay

0.95

Correlation Coefficient

Huber Capital  Mainstay

Almost no diversification

The 3 months correlation between Huber and Mainstay is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Huber Capital Diversified and Mainstay Sp 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Sp 500 and Huber Capital 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 Huber Capital Diversified are associated (or correlated) with Mainstay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Sp 500 has no effect on the direction of Huber Capital i.e., Huber Capital and Mainstay go up and down completely randomly.

Pair Corralation between Huber Capital and Mainstay

Assuming the 90 days horizon Huber Capital Diversified is expected to generate 0.95 times more return on investment than Mainstay. However, Huber Capital Diversified is 1.05 times less risky than Mainstay. It trades about -0.04 of its potential returns per unit of risk. Mainstay Sp 500 is currently generating about -0.08 per unit of risk. If you would invest  2,404  in Huber Capital Diversified on December 21, 2024 and sell it today you would lose (57.00) from holding Huber Capital Diversified or give up 2.37% of portfolio value over 90 days.

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

Huber Capital Diversified  vs.  Mainstay Sp 500

Huber Capital Diversified

Risk-Adjusted Performance

Very Weak

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

Mainstay Sp 500

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mainstay Sp 500 has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Mainstay is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Huber Capital and Mainstay

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

The idea behind Huber Capital Diversified and Mainstay Sp 500 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.

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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.