Correlation Between Vanguard Information and Mainstay Government

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

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

Diversification Opportunities for Vanguard Information and Mainstay Government

-0.53

Correlation Coefficient

Vanguard Information  Mainstay Government

Excellent diversification

The 3 months correlation between Vanguard and Mainstay is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Information Technolog and Mainstay Government Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Government and Vanguard Information 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 Vanguard Information Technology are associated (or correlated) with Mainstay Government. 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 Vanguard Information i.e., Vanguard Information and Mainstay Government go up and down completely randomly.

Pair Corralation between Vanguard Information and Mainstay Government

If you would invest  30,792  in Vanguard Information Technology on October 25, 2024 and sell it today you would earn a total of  2,246  from holding Vanguard Information Technology or generate 7.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.69%
Values	Daily Returns

Vanguard Information Technolog  vs.  Mainstay Government Fund

Vanguard Information

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard Information Technology are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Vanguard Information may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Mainstay Government

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Vanguard Information and Mainstay Government

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

The idea behind Vanguard Information Technology and Mainstay Government Fund 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..