Correlation Between Mainstay High and Voya Cbre

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

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

Diversification Opportunities for Mainstay High and Voya Cbre

0.49

Correlation Coefficient

Mainstay High  Voya Cbre

Very weak diversification

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

Pair Corralation between Mainstay High and Voya Cbre

Assuming the 90 days horizon Mainstay High is expected to generate 1.67 times less return on investment than Voya Cbre. But when comparing it to its historical volatility, Mainstay High Yield is 3.81 times less risky than Voya Cbre. It trades about 0.17 of its potential returns per unit of risk. Voya Cbre Global is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  1,131  in Voya Cbre Global on September 12, 2024 and sell it today you would earn a total of  223.00  from holding Voya Cbre Global or generate 19.72% return on investment over 90 days.

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

Mainstay High Yield  vs.  Voya Cbre Global

Mainstay High Yield

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mainstay High Yield are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Mainstay High is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Voya Cbre Global

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Mainstay High and Voya Cbre

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

The idea behind Mainstay High Yield and Voya Cbre Global 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 Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.