Correlation Between Western Asset and Mainstay Conservative

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Western Asset and Mainstay Conservative 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 Western Asset and Mainstay Conservative into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset Municipal and Mainstay Conservative Etf, you can compare the effects of market volatilities on Western Asset and Mainstay Conservative 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 Western Asset with a short position of Mainstay Conservative. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Mainstay Conservative.

Diversification Opportunities for Western Asset and Mainstay Conservative

0.63
  Correlation Coefficient

Poor diversification

The 3 months correlation between Western and Mainstay is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Municipal and Mainstay Conservative Etf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Conservative Etf and Western Asset 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 Western Asset Municipal are associated (or correlated) with Mainstay Conservative. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Conservative Etf has no effect on the direction of Western Asset i.e., Western Asset and Mainstay Conservative go up and down completely randomly.

Pair Corralation between Western Asset and Mainstay Conservative

Assuming the 90 days horizon Western Asset Municipal is expected to generate 0.46 times more return on investment than Mainstay Conservative. However, Western Asset Municipal is 2.16 times less risky than Mainstay Conservative. It trades about -0.43 of its potential returns per unit of risk. Mainstay Conservative Etf is currently generating about -0.3 per unit of risk. If you would invest  733.00  in Western Asset Municipal on October 8, 2024 and sell it today you would lose (15.00) from holding Western Asset Municipal or give up 2.05% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Western Asset Municipal  vs.  Mainstay Conservative Etf

 Performance 
       Timeline  
Western Asset Municipal 

Risk-Adjusted Performance

0 of 100

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

Risk-Adjusted Performance

0 of 100

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

Western Asset and Mainstay Conservative Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Western Asset and Mainstay Conservative

The main advantage of trading using opposite Western Asset and Mainstay Conservative positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Mainstay Conservative 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 Conservative will offset losses from the drop in Mainstay Conservative's long position.
The idea behind Western Asset Municipal and Mainstay Conservative Etf 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.

Other Complementary Tools

Funds Screener
Find actively-traded funds from around the world traded on over 30 global exchanges
Companies Directory
Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals
Portfolio Backtesting
Avoid under-diversification and over-optimization by backtesting your portfolios
Piotroski F Score
Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals
AI Portfolio Architect
Use AI to generate optimal portfolios and find profitable investment opportunities