Correlation Between TRON and Mainstay Cushing

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

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

Diversification Opportunities for TRON and Mainstay Cushing

0.0

Correlation Coefficient

TRON  Mainstay Cushing

Pay attention - limited upside

The 3 months correlation between TRON and Mainstay is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding TRON and Mainstay Cushing Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Cushing Energy and TRON 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 TRON 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 Energy has no effect on the direction of TRON i.e., TRON and Mainstay Cushing go up and down completely randomly.

Pair Corralation between TRON and Mainstay Cushing

If you would invest (100.00) in Mainstay Cushing Energy on October 25, 2024 and sell it today you would earn a total of  100.00  from holding Mainstay Cushing Energy or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

TRON  vs.  Mainstay Cushing Energy

TRON

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in TRON are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, TRON exhibited solid returns over the last few months and may actually be approaching a breakup point.

Mainstay Cushing Energy

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with TRON and Mainstay Cushing

The main advantage of trading using opposite TRON and Mainstay Cushing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TRON 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 TRON and Mainstay Cushing Energy 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.