Correlation Between Mainstay Growth and Fmasx

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

Diversification Opportunities for Mainstay Growth and Fmasx

0.51

Correlation Coefficient

Mainstay Growth  Fmasx

Very weak diversification

The 3 months correlation between Mainstay and Fmasx is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Growth Etf and Fmasx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fmasx 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 Fmasx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fmasx has no effect on the direction of Mainstay Growth i.e., Mainstay Growth and Fmasx go up and down completely randomly.

Pair Corralation between Mainstay Growth and Fmasx

Assuming the 90 days horizon Mainstay Growth Etf is expected to generate 0.65 times more return on investment than Fmasx. However, Mainstay Growth Etf is 1.54 times less risky than Fmasx. It trades about -0.05 of its potential returns per unit of risk. Fmasx is currently generating about -0.08 per unit of risk. If you would invest  1,429  in Mainstay Growth Etf on December 20, 2024 and sell it today you would lose (36.00) from holding Mainstay Growth Etf or give up 2.52% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.33%
Values	Daily Returns

Mainstay Growth Etf  vs.  Fmasx

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 basic indicators, Mainstay Growth is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Fmasx

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fmasx has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Fmasx 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 Fmasx

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

The idea behind Mainstay Growth Etf and Fmasx 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.