Correlation Between Mainstay Tax and Mainstay Candriam

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

By analyzing existing cross correlation between Mainstay Tax Free and Mainstay Candriam Emerging, you can compare the effects of market volatilities on Mainstay Tax and Mainstay Candriam 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 Tax with a short position of Mainstay Candriam. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Tax and Mainstay Candriam.

Diversification Opportunities for Mainstay Tax and Mainstay Candriam

-0.14

Correlation Coefficient

Mainstay Tax  Mainstay Candriam

Good diversification

The 3 months correlation between Mainstay and Mainstay is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Tax Free and Mainstay Candriam Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Candriam and Mainstay Tax 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 Tax Free are associated (or correlated) with Mainstay Candriam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Candriam has no effect on the direction of Mainstay Tax i.e., Mainstay Tax and Mainstay Candriam go up and down completely randomly.

Pair Corralation between Mainstay Tax and Mainstay Candriam

Assuming the 90 days horizon Mainstay Tax Free is expected to under-perform the Mainstay Candriam. But the mutual fund apears to be less risky and, when comparing its historical volatility, Mainstay Tax Free is 3.13 times less risky than Mainstay Candriam. The mutual fund trades about -0.02 of its potential returns per unit of risk. The Mainstay Candriam Emerging is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,015  in Mainstay Candriam Emerging on September 18, 2024 and sell it today you would earn a total of  42.00  from holding Mainstay Candriam Emerging or generate 4.14% return on investment over 90 days.

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

Mainstay Tax Free  vs.  Mainstay Candriam Emerging

Mainstay Tax Free

Risk-Adjusted Performance

0 of 100

Very Weak

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

Mainstay Candriam

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Mainstay Candriam Emerging are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Mainstay Candriam 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 Tax and Mainstay Candriam

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

The idea behind Mainstay Tax Free and Mainstay Candriam Emerging 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.