Correlation Between Science Technology and Mainstay International

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

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

Diversification Opportunities for Science Technology and Mainstay International

0.0

Correlation Coefficient

Science Technology  Mainstay International

Pay attention - limited upside

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

Pair Corralation between Science Technology and Mainstay International

If you would invest (100.00) in Mainstay International Equity on December 22, 2024 and sell it today you would earn a total of  100.00  from holding Mainstay International Equity 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

Science Technology Fund  vs.  Mainstay International Equity

Science Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Science Technology Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Mainstay International

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Science Technology and Mainstay International

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

The idea behind Science Technology Fund and Mainstay International Equity 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.