Correlation Between Mainstay Large and Volumetric Fund

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

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

Diversification Opportunities for Mainstay Large and Volumetric Fund

0.27

Correlation Coefficient

Mainstay Large  Volumetric Fund

Modest diversification

The 3 months correlation between Mainstay and Volumetric is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Large Cap and Volumetric Fund Volumetric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Volumetric Fund Volu and Mainstay Large 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 Large Cap are associated (or correlated) with Volumetric Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Volumetric Fund Volu has no effect on the direction of Mainstay Large i.e., Mainstay Large and Volumetric Fund go up and down completely randomly.

Pair Corralation between Mainstay Large and Volumetric Fund

Assuming the 90 days horizon Mainstay Large Cap is expected to under-perform the Volumetric Fund. In addition to that, Mainstay Large is 5.79 times more volatile than Volumetric Fund Volumetric. It trades about -0.08 of its total potential returns per unit of risk. Volumetric Fund Volumetric is currently generating about 0.17 per unit of volatility. If you would invest  2,455  in Volumetric Fund Volumetric on September 12, 2024 and sell it today you would earn a total of  197.00  from holding Volumetric Fund Volumetric or generate 8.02% return on investment over 90 days.

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

Mainstay Large Cap  vs.  Volumetric Fund Volumetric

Mainstay Large Cap

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mainstay Large Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Volumetric Fund Volu

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Volumetric Fund Volumetric are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak primary indicators, Volumetric Fund may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Mainstay Large and Volumetric Fund

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

The idea behind Mainstay Large Cap and Volumetric Fund Volumetric 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.