Correlation Between Mainstay Mackay and Transamerica Mlp

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

Diversification Opportunities for Mainstay Mackay and Transamerica Mlp

-0.03

Correlation Coefficient

Mainstay Mackay  Transamerica Mlp

Good diversification

The 3 months correlation between Mainstay and Transamerica is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Mackay New and Transamerica Mlp Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transamerica Mlp Energy 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 Transamerica Mlp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transamerica Mlp Energy has no effect on the direction of Mainstay Mackay i.e., Mainstay Mackay and Transamerica Mlp go up and down completely randomly.

Pair Corralation between Mainstay Mackay and Transamerica Mlp

Assuming the 90 days horizon Mainstay Mackay is expected to generate 18.77 times less return on investment than Transamerica Mlp. But when comparing it to its historical volatility, Mainstay Mackay New is 5.08 times less risky than Transamerica Mlp. It trades about 0.02 of its potential returns per unit of risk. Transamerica Mlp Energy is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  882.00  in Transamerica Mlp Energy on December 24, 2024 and sell it today you would earn a total of  53.00  from holding Transamerica Mlp Energy or generate 6.01% return on investment over 90 days.

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

Mainstay Mackay New  vs.  Transamerica Mlp Energy

Mainstay Mackay New

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Mainstay Mackay New are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. 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.

Transamerica Mlp Energy

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Transamerica Mlp Energy are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak essential indicators, Transamerica Mlp may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Mainstay Mackay and Transamerica Mlp

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

The idea behind Mainstay Mackay New and Transamerica Mlp Energy 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.