Correlation Between Volumetric Fund and Mainstay Balanced

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

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

Diversification Opportunities for Volumetric Fund and Mainstay Balanced

0.49

Correlation Coefficient

Volumetric Fund  Mainstay Balanced

Very weak diversification

The 3 months correlation between Volumetric and Mainstay is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Volumetric Fund Volumetric and Mainstay Balanced Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Balanced and Volumetric Fund 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 Volumetric Fund Volumetric are associated (or correlated) with Mainstay Balanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Balanced has no effect on the direction of Volumetric Fund i.e., Volumetric Fund and Mainstay Balanced go up and down completely randomly.

Pair Corralation between Volumetric Fund and Mainstay Balanced

Assuming the 90 days horizon Volumetric Fund Volumetric is expected to generate 0.57 times more return on investment than Mainstay Balanced. However, Volumetric Fund Volumetric is 1.75 times less risky than Mainstay Balanced. It trades about -0.03 of its potential returns per unit of risk. Mainstay Balanced Fund is currently generating about -0.21 per unit of risk. If you would invest  2,653  in Volumetric Fund Volumetric on September 15, 2024 and sell it today you would lose (11.00) from holding Volumetric Fund Volumetric or give up 0.41% of portfolio value over 90 days.

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

Volumetric Fund Volumetric  vs.  Mainstay Balanced Fund

Volumetric Fund Volu

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Volumetric Fund Volumetric are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong primary indicators, Volumetric Fund is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Mainstay Balanced

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Volumetric Fund and Mainstay Balanced

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

The idea behind Volumetric Fund Volumetric and Mainstay Balanced 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.

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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.