Correlation Between Mainstay Indexed and Sitka Gold

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

By analyzing existing cross correlation between Mainstay Indexed Bond and Sitka Gold Corp, you can compare the effects of market volatilities on Mainstay Indexed and Sitka Gold 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 Indexed with a short position of Sitka Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Indexed and Sitka Gold.

Diversification Opportunities for Mainstay Indexed and Sitka Gold

-0.51

Correlation Coefficient

Mainstay Indexed  Sitka Gold

Excellent diversification

The 3 months correlation between MAINSTAY and Sitka is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Indexed Bond and Sitka Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sitka Gold Corp and Mainstay Indexed 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 Indexed Bond are associated (or correlated) with Sitka Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sitka Gold Corp has no effect on the direction of Mainstay Indexed i.e., Mainstay Indexed and Sitka Gold go up and down completely randomly.

Pair Corralation between Mainstay Indexed and Sitka Gold

Assuming the 90 days horizon Mainstay Indexed Bond is expected to generate 0.02 times more return on investment than Sitka Gold. However, Mainstay Indexed Bond is 59.02 times less risky than Sitka Gold. It trades about 0.28 of its potential returns per unit of risk. Sitka Gold Corp is currently generating about -0.22 per unit of risk. If you would invest  907.00  in Mainstay Indexed Bond on October 22, 2024 and sell it today you would earn a total of  4.00  from holding Mainstay Indexed Bond or generate 0.44% return on investment over 90 days.

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

Mainstay Indexed Bond  vs.  Sitka Gold Corp

Mainstay Indexed Bond

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mainstay Indexed Bond are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Mainstay Indexed is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Sitka Gold Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sitka Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's forward-looking signals remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Mainstay Indexed and Sitka Gold

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

The idea behind Mainstay Indexed Bond and Sitka Gold Corp 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.