Correlation Between Short Real and Mainstay Nerstone

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

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

Diversification Opportunities for Short Real and Mainstay Nerstone

-0.09

Correlation Coefficient

Short Real  Mainstay Nerstone

Good diversification

The 3 months correlation between Short and Mainstay is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Short Real Estate and Mainstay Nerstone Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Nerstone Growth and Short Real 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 Short Real Estate are associated (or correlated) with Mainstay Nerstone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Nerstone Growth has no effect on the direction of Short Real i.e., Short Real and Mainstay Nerstone go up and down completely randomly.

Pair Corralation between Short Real and Mainstay Nerstone

Assuming the 90 days horizon Short Real Estate is expected to under-perform the Mainstay Nerstone. In addition to that, Short Real is 1.2 times more volatile than Mainstay Nerstone Growth. It trades about -0.02 of its total potential returns per unit of risk. Mainstay Nerstone Growth is currently generating about -0.01 per unit of volatility. If you would invest  5,244  in Mainstay Nerstone Growth on October 7, 2024 and sell it today you would lose (45.00) from holding Mainstay Nerstone Growth or give up 0.86% of portfolio value over 90 days.

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

Short Real Estate  vs.  Mainstay Nerstone Growth

Short Real Estate

Risk-Adjusted Performance

0 of 100

Very Weak

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

Mainstay Nerstone Growth

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Mainstay Nerstone Growth are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Mainstay Nerstone is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Short Real and Mainstay Nerstone

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

The idea behind Short Real Estate and Mainstay Nerstone Growth 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.