Correlation Between MainStay CBRE and Ecofin Sustainable

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

By analyzing existing cross correlation between MainStay CBRE Global and Ecofin Sustainable And, you can compare the effects of market volatilities on MainStay CBRE and Ecofin Sustainable 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 CBRE with a short position of Ecofin Sustainable. Check out your portfolio center. Please also check ongoing floating volatility patterns of MainStay CBRE and Ecofin Sustainable.

Diversification Opportunities for MainStay CBRE and Ecofin Sustainable

0.88

Correlation Coefficient

MainStay CBRE  Ecofin Sustainable

Very poor diversification

The 3 months correlation between MainStay and Ecofin is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding MainStay CBRE Global and Ecofin Sustainable And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecofin Sustainable And and MainStay CBRE 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 CBRE Global are associated (or correlated) with Ecofin Sustainable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ecofin Sustainable And has no effect on the direction of MainStay CBRE i.e., MainStay CBRE and Ecofin Sustainable go up and down completely randomly.

Pair Corralation between MainStay CBRE and Ecofin Sustainable

Given the investment horizon of 90 days MainStay CBRE Global is expected to under-perform the Ecofin Sustainable. In addition to that, MainStay CBRE is 1.62 times more volatile than Ecofin Sustainable And. It trades about -0.39 of its total potential returns per unit of risk. Ecofin Sustainable And is currently generating about -0.26 per unit of volatility. If you would invest  1,247  in Ecofin Sustainable And on September 23, 2024 and sell it today you would lose (49.00) from holding Ecofin Sustainable And or give up 3.93% of portfolio value over 90 days.

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

MainStay CBRE Global  vs.  Ecofin Sustainable And

MainStay CBRE Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MainStay CBRE Global has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Ecofin Sustainable And

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ecofin Sustainable And has generated negative risk-adjusted returns adding no value to fund investors. Despite nearly stable basic indicators, Ecofin Sustainable is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with MainStay CBRE and Ecofin Sustainable

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

The idea behind MainStay CBRE Global and Ecofin Sustainable And 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.