Correlation Between Mainstay High and Columbia Global

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

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

Diversification Opportunities for Mainstay High and Columbia Global

-0.21

Correlation Coefficient

Mainstay High  Columbia Global

Very good diversification

The 3 months correlation between Mainstay and Columbia is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay High Yield and Columbia Global Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Global Tech and Mainstay High 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 High Yield are associated (or correlated) with Columbia Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Global Tech has no effect on the direction of Mainstay High i.e., Mainstay High and Columbia Global go up and down completely randomly.

Pair Corralation between Mainstay High and Columbia Global

Assuming the 90 days horizon Mainstay High Yield is expected to generate 0.09 times more return on investment than Columbia Global. However, Mainstay High Yield is 11.42 times less risky than Columbia Global. It trades about 0.19 of its potential returns per unit of risk. Columbia Global Technology is currently generating about -0.1 per unit of risk. If you would invest  514.00  in Mainstay High Yield on December 22, 2024 and sell it today you would earn a total of  9.00  from holding Mainstay High Yield or generate 1.75% return on investment over 90 days.

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

Mainstay High Yield  vs.  Columbia Global Technology

Mainstay High Yield

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mainstay High Yield are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Mainstay High is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Columbia Global Tech

Risk-Adjusted Performance

Very Weak

Over the last 90 days Columbia Global Technology has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Mainstay High and Columbia Global

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

The idea behind Mainstay High Yield and Columbia Global 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.

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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.