Correlation Between Mainstay Government and Vanguard Information

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

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

Diversification Opportunities for Mainstay Government and Vanguard Information

-0.53

Correlation Coefficient

Mainstay Government  Vanguard Information

Excellent diversification

The 3 months correlation between Mainstay and Vanguard is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Government Fund and Vanguard Information Technolog in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Information and Mainstay Government 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 Government Fund are associated (or correlated) with Vanguard Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Information has no effect on the direction of Mainstay Government i.e., Mainstay Government and Vanguard Information go up and down completely randomly.

Pair Corralation between Mainstay Government and Vanguard Information

If you would invest  743.00  in Mainstay Government Fund on October 10, 2024 and sell it today you would earn a total of  0.00  from holding Mainstay Government Fund or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	4.76%
Values	Daily Returns

Mainstay Government Fund  vs.  Vanguard Information Technolog

Mainstay Government

Risk-Adjusted Performance

0 of 100

Very Weak

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

Vanguard Information

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard Information Technology are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Vanguard Information 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 Government and Vanguard Information

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

The idea behind Mainstay Government Fund and Vanguard Information Technology 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.