Correlation Between Ppm High and Mainstay Cushing

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

By analyzing existing cross correlation between Ppm High Yield and Mainstay Cushing Mlp, you can compare the effects of market volatilities on Ppm High and Mainstay Cushing 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 Ppm High with a short position of Mainstay Cushing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ppm High and Mainstay Cushing.

Diversification Opportunities for Ppm High and Mainstay Cushing

0.79

Correlation Coefficient

Ppm High  Mainstay Cushing

Poor diversification

The 3 months correlation between Ppm and Mainstay is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Ppm High Yield and Mainstay Cushing Mlp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Cushing Mlp and Ppm High 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 Ppm High Yield are associated (or correlated) with Mainstay Cushing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Cushing Mlp has no effect on the direction of Ppm High i.e., Ppm High and Mainstay Cushing go up and down completely randomly.

Pair Corralation between Ppm High and Mainstay Cushing

Assuming the 90 days horizon Ppm High is expected to generate 11.34 times less return on investment than Mainstay Cushing. But when comparing it to its historical volatility, Ppm High Yield is 6.24 times less risky than Mainstay Cushing. It trades about 0.17 of its potential returns per unit of risk. Mainstay Cushing Mlp is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest  1,108  in Mainstay Cushing Mlp on September 3, 2024 and sell it today you would earn a total of  213.00  from holding Mainstay Cushing Mlp or generate 19.22% return on investment over 90 days.

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

Ppm High Yield  vs.  Mainstay Cushing Mlp

Ppm High Yield

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ppm High Yield are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Ppm High is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Mainstay Cushing Mlp

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Mainstay Cushing Mlp are ranked lower than 24 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Mainstay Cushing showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ppm High and Mainstay Cushing

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

The idea behind Ppm High Yield and Mainstay Cushing Mlp 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .