Correlation Between Mainstay Large and Americafirst Monthly

Can any of the company-specific risk be diversified away by investing in both Mainstay Large and Americafirst Monthly 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 Americafirst Monthly 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 Americafirst Monthly Risk On, you can compare the effects of market volatilities on Mainstay Large and Americafirst Monthly 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 Americafirst Monthly. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Large and Americafirst Monthly.

Diversification Opportunities for Mainstay Large and Americafirst Monthly

0.91

Correlation Coefficient

Mainstay Large  Americafirst Monthly

Almost no diversification

The 3 months correlation between Mainstay and Americafirst is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Large Cap and Americafirst Monthly Risk On in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Americafirst Monthly 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 Americafirst Monthly. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Americafirst Monthly has no effect on the direction of Mainstay Large i.e., Mainstay Large and Americafirst Monthly go up and down completely randomly.

Pair Corralation between Mainstay Large and Americafirst Monthly

Assuming the 90 days horizon Mainstay Large Cap is expected to under-perform the Americafirst Monthly. But the mutual fund apears to be less risky and, when comparing its historical volatility, Mainstay Large Cap is 1.69 times less risky than Americafirst Monthly. The mutual fund trades about -0.05 of its potential returns per unit of risk. The Americafirst Monthly Risk On is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,474  in Americafirst Monthly Risk On on October 11, 2024 and sell it today you would earn a total of  16.00  from holding Americafirst Monthly Risk On or generate 1.09% return on investment over 90 days.

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

Mainstay Large Cap  vs.  Americafirst Monthly Risk On

Mainstay Large Cap

Risk-Adjusted Performance

0 of 100

Very Weak

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

Americafirst Monthly

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Americafirst Monthly Risk On are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Americafirst Monthly may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Mainstay Large and Americafirst Monthly

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

The idea behind Mainstay Large Cap and Americafirst Monthly Risk On 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.