Correlation Between Mainstay Mackay and Mainstay Total

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

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

Diversification Opportunities for Mainstay Mackay and Mainstay Total

0.65

Correlation Coefficient

Mainstay Mackay  Mainstay Total

Poor diversification

The 3 months correlation between Mainstay and Mainstay is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Mackay New and Mainstay Total Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Total Return and Mainstay Mackay 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 Mackay New are associated (or correlated) with Mainstay Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Total Return has no effect on the direction of Mainstay Mackay i.e., Mainstay Mackay and Mainstay Total go up and down completely randomly.

Pair Corralation between Mainstay Mackay and Mainstay Total

Assuming the 90 days horizon Mainstay Mackay New is expected to generate 1.08 times more return on investment than Mainstay Total. However, Mainstay Mackay is 1.08 times more volatile than Mainstay Total Return. It trades about -0.35 of its potential returns per unit of risk. Mainstay Total Return is currently generating about -0.4 per unit of risk. If you would invest  975.00  in Mainstay Mackay New on September 28, 2024 and sell it today you would lose (19.00) from holding Mainstay Mackay New or give up 1.95% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.24%
Values	Daily Returns

Mainstay Mackay New  vs.  Mainstay Total Return

Mainstay Mackay New

Risk-Adjusted Performance

0 of 100

Very Weak

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

Mainstay Total Return

Risk-Adjusted Performance

0 of 100

Very Weak

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

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

The idea behind Mainstay Mackay New and Mainstay Total Return 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.