Correlation Between Artisan High and Mainstay

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

By analyzing existing cross correlation between Artisan High Income and Mainstay Sp 500, you can compare the effects of market volatilities on Artisan High and Mainstay 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 Artisan High with a short position of Mainstay. Check out your portfolio center. Please also check ongoing floating volatility patterns of Artisan High and Mainstay.

Diversification Opportunities for Artisan High and Mainstay

0.52

Correlation Coefficient

Artisan High  Mainstay

Very weak diversification

The 3 months correlation between Artisan and Mainstay is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Artisan High Income and Mainstay Sp 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Sp 500 and Artisan High 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 Artisan High Income are associated (or correlated) with Mainstay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Sp 500 has no effect on the direction of Artisan High i.e., Artisan High and Mainstay go up and down completely randomly.

Pair Corralation between Artisan High and Mainstay

Assuming the 90 days horizon Artisan High is expected to generate 1.15 times less return on investment than Mainstay. But when comparing it to its historical volatility, Artisan High Income is 6.04 times less risky than Mainstay. It trades about 0.24 of its potential returns per unit of risk. Mainstay Sp 500 is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  6,431  in Mainstay Sp 500 on September 15, 2024 and sell it today you would earn a total of  155.00  from holding Mainstay Sp 500 or generate 2.41% return on investment over 90 days.

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

Artisan High Income  vs.  Mainstay Sp 500

Artisan High Income

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Artisan High Income are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Artisan High is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Mainstay Sp 500

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Mainstay Sp 500 are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Mainstay is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Artisan High and Mainstay

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

The idea behind Artisan High Income and Mainstay Sp 500 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..