Correlation Between Mainstay Growth and Mainstay Map

Can any of the company-specific risk be diversified away by investing in both Mainstay Growth 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 Growth 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 Growth Etf and Mainstay Map Equity, you can compare the effects of market volatilities on Mainstay Growth 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 Growth with a short position of Mainstay Map. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Growth and Mainstay Map.

Diversification Opportunities for Mainstay Growth and Mainstay Map

0.58

Correlation Coefficient

Mainstay Growth  Mainstay Map

Very weak diversification

The 3 months correlation between Mainstay and Mainstay is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Growth Etf 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 Growth 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 Growth Etf 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 Growth i.e., Mainstay Growth and Mainstay Map go up and down completely randomly.

Pair Corralation between Mainstay Growth and Mainstay Map

Assuming the 90 days horizon Mainstay Growth Etf is expected to under-perform the Mainstay Map. In addition to that, Mainstay Growth is 1.09 times more volatile than Mainstay Map Equity. It trades about -0.07 of its total potential returns per unit of risk. Mainstay Map Equity is currently generating about 0.05 per unit of volatility. If you would invest  1,989  in Mainstay Map Equity on December 22, 2024 and sell it today you would earn a total of  38.00  from holding Mainstay Map Equity or generate 1.91% return on investment over 90 days.

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

Mainstay Growth Etf  vs.  Mainstay Map Equity

Mainstay Growth Etf

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mainstay Growth Etf has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Mainstay Growth 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 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong 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 Growth and Mainstay Map

The main advantage of trading using opposite Mainstay Growth and Mainstay Map positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Growth 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 Growth Etf 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.

Check out your portfolio center.

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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.