Correlation Between Mainstay Moderate and Mainstay Map

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

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

Diversification Opportunities for Mainstay Moderate and Mainstay Map

-0.64

Correlation Coefficient

Mainstay Moderate  Mainstay Map

Excellent diversification

The 3 months correlation between Mainstay and Mainstay is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Moderate Allocation and Mainstay Map Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Map Equity and Mainstay Moderate 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 Moderate Allocation are associated (or correlated) with Mainstay Map. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Map Equity has no effect on the direction of Mainstay Moderate i.e., Mainstay Moderate and Mainstay Map go up and down completely randomly.

Pair Corralation between Mainstay Moderate and Mainstay Map

Assuming the 90 days horizon Mainstay Moderate Allocation is expected to under-perform the Mainstay Map. But the mutual fund apears to be less risky and, when comparing its historical volatility, Mainstay Moderate Allocation is 1.04 times less risky than Mainstay Map. The mutual fund trades about -0.03 of its potential returns per unit of risk. The Mainstay Map Equity is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  3,184  in Mainstay Map Equity on December 22, 2024 and sell it today you would earn a total of  71.00  from holding Mainstay Map Equity or generate 2.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	66.67%
Values	Daily Returns

Mainstay Moderate Allocation  vs.  Mainstay Map Equity

Mainstay Moderate

Risk-Adjusted Performance

Very Weak

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

Mainstay Map Equity

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Mainstay Map Equity are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Mainstay Map 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 Moderate and Mainstay Map

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

The idea behind Mainstay Moderate Allocation and Mainstay Map Equity 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.