Correlation Between Mainstay Nerstone and Virtus Nfj

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

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

Diversification Opportunities for Mainstay Nerstone and Virtus Nfj

0.63

Correlation Coefficient

Mainstay Nerstone  Virtus Nfj

Poor diversification

The 3 months correlation between Mainstay and Virtus is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Nerstone Growth and Virtus Nfj Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Nfj Large and Mainstay Nerstone 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 Mainstay Nerstone Growth are associated (or correlated) with Virtus Nfj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Nfj Large has no effect on the direction of Mainstay Nerstone i.e., Mainstay Nerstone and Virtus Nfj go up and down completely randomly.

Pair Corralation between Mainstay Nerstone and Virtus Nfj

Assuming the 90 days horizon Mainstay Nerstone Growth is expected to generate 1.56 times more return on investment than Virtus Nfj. However, Mainstay Nerstone is 1.56 times more volatile than Virtus Nfj Large Cap. It trades about 0.03 of its potential returns per unit of risk. Virtus Nfj Large Cap is currently generating about -0.12 per unit of risk. If you would invest  4,191  in Mainstay Nerstone Growth on September 26, 2024 and sell it today you would earn a total of  57.00  from holding Mainstay Nerstone Growth or generate 1.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	97.62%
Values	Daily Returns

Mainstay Nerstone Growth  vs.  Virtus Nfj Large Cap

Mainstay Nerstone Growth

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Mainstay Nerstone Growth are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental drivers, Mainstay Nerstone is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Virtus Nfj Large

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Mainstay Nerstone and Virtus Nfj

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

The idea behind Mainstay Nerstone Growth and Virtus Nfj 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.