Correlation Between NYSE Composite and Mainstay New

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Mainstay New 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 NYSE Composite and Mainstay New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Mainstay New York, you can compare the effects of market volatilities on NYSE Composite and Mainstay New 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 NYSE Composite with a short position of Mainstay New. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Mainstay New.

Diversification Opportunities for NYSE Composite and Mainstay New

0.75
  Correlation Coefficient

Poor diversification

The 3 months correlation between NYSE and Mainstay is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Mainstay New York in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay New York and NYSE Composite 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 NYSE Composite are associated (or correlated) with Mainstay New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay New York has no effect on the direction of NYSE Composite i.e., NYSE Composite and Mainstay New go up and down completely randomly.
    Optimize

Pair Corralation between NYSE Composite and Mainstay New

Assuming the 90 days trading horizon NYSE Composite is expected to generate 2.96 times more return on investment than Mainstay New. However, NYSE Composite is 2.96 times more volatile than Mainstay New York. It trades about -0.05 of its potential returns per unit of risk. Mainstay New York is currently generating about -0.39 per unit of risk. If you would invest  1,962,768  in NYSE Composite on October 17, 2024 and sell it today you would lose (20,497) from holding NYSE Composite or give up 1.04% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

NYSE Composite  vs.  Mainstay New York

 Performance 
       Timeline  

NYSE Composite and Mainstay New Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with NYSE Composite and Mainstay New

The main advantage of trading using opposite NYSE Composite and Mainstay New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Mainstay New 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 New will offset losses from the drop in Mainstay New's long position.
The idea behind NYSE Composite and Mainstay New York 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.

Other Complementary Tools

Bonds Directory
Find actively traded corporate debentures issued by US companies
Share Portfolio
Track or share privately all of your investments from the convenience of any device
Technical Analysis
Check basic technical indicators and analysis based on most latest market data
Insider Screener
Find insiders across different sectors to evaluate their impact on performance
Equity Valuation
Check real value of public entities based on technical and fundamental data