Correlation Between Mainstay Large and Harbor Capital

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

Diversification Opportunities for Mainstay Large and Harbor Capital

-0.16
  Correlation Coefficient

Good diversification

The 3 months correlation between Mainstay and Harbor is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Large Cap and Harbor Capital Appreciation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harbor Capital Appre 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 Harbor Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harbor Capital Appre has no effect on the direction of Mainstay Large i.e., Mainstay Large and Harbor Capital go up and down completely randomly.

Pair Corralation between Mainstay Large and Harbor Capital

Assuming the 90 days horizon Mainstay Large Cap is expected to under-perform the Harbor Capital. In addition to that, Mainstay Large is 1.4 times more volatile than Harbor Capital Appreciation. It trades about -0.06 of its total potential returns per unit of risk. Harbor Capital Appreciation is currently generating about -0.02 per unit of volatility. If you would invest  11,930  in Harbor Capital Appreciation on September 24, 2024 and sell it today you would lose (376.00) from holding Harbor Capital Appreciation or give up 3.15% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Mainstay Large Cap  vs.  Harbor Capital Appreciation

 Performance 
       Timeline  
Mainstay Large Cap 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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 basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.
Harbor Capital Appre 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Harbor Capital Appreciation has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Harbor Capital is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Mainstay Large and Harbor Capital Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Mainstay Large and Harbor Capital

The main advantage of trading using opposite Mainstay Large and Harbor Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Large position performs unexpectedly, Harbor Capital 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 Harbor Capital will offset losses from the drop in Harbor Capital's long position.
The idea behind Mainstay Large Cap and Harbor Capital Appreciation 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..

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