Correlation Between Mainstay Large and Mainstay International
Can any of the company-specific risk be diversified away by investing in both Mainstay Large and Mainstay International 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 Large and Mainstay International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mainstay Large Cap and Mainstay International Opportunities, you can compare the effects of market volatilities on Mainstay Large and Mainstay International 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 Large with a short position of Mainstay International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Large and Mainstay International.
Diversification Opportunities for Mainstay Large and Mainstay International
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mainstay and Mainstay is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Large Cap and Mainstay International Opportu in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay International and Mainstay Large 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 Large Cap are associated (or correlated) with Mainstay International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay International has no effect on the direction of Mainstay Large i.e., Mainstay Large and Mainstay International go up and down completely randomly.
Pair Corralation between Mainstay Large and Mainstay International
Assuming the 90 days horizon Mainstay Large Cap is expected to under-perform the Mainstay International. In addition to that, Mainstay Large is 3.42 times more volatile than Mainstay International Opportunities. It trades about -0.04 of its total potential returns per unit of risk. Mainstay International Opportunities is currently generating about -0.02 per unit of volatility. If you would invest 780.00 in Mainstay International Opportunities on September 17, 2024 and sell it today you would lose (7.00) from holding Mainstay International Opportunities or give up 0.9% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Mainstay Large Cap vs. Mainstay International Opportu
Performance |
Timeline |
Mainstay Large Cap |
Mainstay International |
Mainstay Large and Mainstay International Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Mainstay Large and Mainstay International
The main advantage of trading using opposite Mainstay Large and Mainstay International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Large position performs unexpectedly, Mainstay International 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 International will offset losses from the drop in Mainstay International's long position.Mainstay Large vs. Mainstay High Yield | Mainstay Large vs. Mainstay Income Builder | Mainstay Large vs. Mainstay Large Cap | Mainstay Large vs. Mainstay Winslow Large |
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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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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