Correlation Between Aggressive Growth and Mainstay

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

By analyzing existing cross correlation between Aggressive Growth Portfolio and Mainstay Government Liquidity, you can compare the effects of market volatilities on Aggressive Growth and Mainstay 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 Aggressive Growth with a short position of Mainstay. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aggressive Growth and Mainstay.

Diversification Opportunities for Aggressive Growth and Mainstay

0.0

Correlation Coefficient

Aggressive Growth  Mainstay

Pay attention - limited upside

The 3 months correlation between AGGRESSIVE and Mainstay is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Aggressive Growth Portfolio and Mainstay Government Liquidity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Government and Aggressive 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 Aggressive Growth Portfolio are associated (or correlated) with Mainstay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Government has no effect on the direction of Aggressive Growth i.e., Aggressive Growth and Mainstay go up and down completely randomly.

Pair Corralation between Aggressive Growth and Mainstay

If you would invest  100.00  in Mainstay Government Liquidity on December 28, 2024 and sell it today you would earn a total of  0.00  from holding Mainstay Government Liquidity or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Aggressive Growth Portfolio  vs.  Mainstay Government Liquidity

Aggressive Growth

Risk-Adjusted Performance

Very Weak

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

Mainstay Government

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Aggressive Growth and Mainstay

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

The idea behind Aggressive Growth Portfolio and Mainstay Government Liquidity 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.