Correlation Between Mainstay Conservative and Mainstay New

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

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

Diversification Opportunities for Mainstay Conservative and Mainstay New

0.82

Correlation Coefficient

Mainstay Conservative  Mainstay New

Very poor diversification

The 3 months correlation between Mainstay and Mainstay is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Conservative Etf and Mainstay New York in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay New York and Mainstay Conservative 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 Conservative Etf are associated (or correlated) with Mainstay New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay New York has no effect on the direction of Mainstay Conservative i.e., Mainstay Conservative and Mainstay New go up and down completely randomly.

Pair Corralation between Mainstay Conservative and Mainstay New

Assuming the 90 days horizon Mainstay Conservative Etf is expected to generate 1.87 times more return on investment than Mainstay New. However, Mainstay Conservative is 1.87 times more volatile than Mainstay New York. It trades about 0.06 of its potential returns per unit of risk. Mainstay New York is currently generating about 0.02 per unit of risk. If you would invest  1,016  in Mainstay Conservative Etf on October 17, 2024 and sell it today you would earn a total of  59.00  from holding Mainstay Conservative Etf or generate 5.81% return on investment over 90 days.

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

Mainstay Conservative Etf  vs.  Mainstay New York

Mainstay Conservative Etf

Risk-Adjusted Performance

0 of 100

Very Weak

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

Mainstay New York

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mainstay New York has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Mainstay New 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 Conservative and Mainstay New

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

The idea behind Mainstay Conservative Etf and Mainstay New York 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.