Correlation Between Mainstay Income and Mainstay Growth

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

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

Diversification Opportunities for Mainstay Income and Mainstay Growth

0.48

Correlation Coefficient

Mainstay Income  Mainstay Growth

Very weak diversification

The 3 months correlation between Mainstay and Mainstay is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Income Builder and Mainstay Growth Etf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Growth Etf and Mainstay Income 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 Income Builder are associated (or correlated) with Mainstay Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Growth Etf has no effect on the direction of Mainstay Income i.e., Mainstay Income and Mainstay Growth go up and down completely randomly.

Pair Corralation between Mainstay Income and Mainstay Growth

Assuming the 90 days horizon Mainstay Income is expected to generate 3.62 times less return on investment than Mainstay Growth. But when comparing it to its historical volatility, Mainstay Income Builder is 1.32 times less risky than Mainstay Growth. It trades about 0.07 of its potential returns per unit of risk. Mainstay Growth Etf is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  1,399  in Mainstay Growth Etf on September 5, 2024 and sell it today you would earn a total of  105.00  from holding Mainstay Growth Etf or generate 7.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Mainstay Income Builder  vs.  Mainstay Growth Etf

Mainstay Income Builder

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Mainstay Income Builder are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Mainstay Income is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Mainstay Growth Etf

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mainstay Growth Etf are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Mainstay Growth may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Mainstay Income and Mainstay Growth

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

The idea behind Mainstay Income Builder and Mainstay Growth 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.