Correlation Between Mainstay International and Gurtin California

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

By analyzing existing cross correlation between Mainstay International Opportunities and Gurtin California Muni, you can compare the effects of market volatilities on Mainstay International and Gurtin California 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 International with a short position of Gurtin California. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay International and Gurtin California.

Diversification Opportunities for Mainstay International and Gurtin California

0.46

Correlation Coefficient

Mainstay International  Gurtin California

Very weak diversification

The 3 months correlation between Mainstay and Gurtin is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay International Opportu and Gurtin California Muni in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gurtin California Muni and Mainstay International 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 International Opportunities are associated (or correlated) with Gurtin California. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gurtin California Muni has no effect on the direction of Mainstay International i.e., Mainstay International and Gurtin California go up and down completely randomly.

Pair Corralation between Mainstay International and Gurtin California

Assuming the 90 days horizon Mainstay International Opportunities is expected to generate 6.37 times more return on investment than Gurtin California. However, Mainstay International is 6.37 times more volatile than Gurtin California Muni. It trades about 0.17 of its potential returns per unit of risk. Gurtin California Muni is currently generating about 0.1 per unit of risk. If you would invest  753.00  in Mainstay International Opportunities on October 25, 2024 and sell it today you would earn a total of  17.00  from holding Mainstay International Opportunities or generate 2.26% return on investment over 90 days.

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

Mainstay International Opportu  vs.  Gurtin California Muni

Mainstay International

Risk-Adjusted Performance

0 of 100

Very Weak

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

Gurtin California Muni

Risk-Adjusted Performance

0 of 100

Weak

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

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

The idea behind Mainstay International Opportunities and Gurtin California Muni 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.