Correlation Between Mainstay Winslow and Mainstay Large

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

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

Diversification Opportunities for Mainstay Winslow and Mainstay Large

1.0

Correlation Coefficient

Mainstay Winslow  Mainstay Large

No risk reduction

The 3 months correlation between Mainstay and Mainstay is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Winslow Large and Mainstay Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Large Cap and Mainstay Winslow 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 Winslow Large are associated (or correlated) with Mainstay Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Large Cap has no effect on the direction of Mainstay Winslow i.e., Mainstay Winslow and Mainstay Large go up and down completely randomly.

Pair Corralation between Mainstay Winslow and Mainstay Large

Assuming the 90 days horizon Mainstay Winslow is expected to generate 1.0 times less return on investment than Mainstay Large. In addition to that, Mainstay Winslow is 1.0 times more volatile than Mainstay Large Cap. It trades about 0.18 of its total potential returns per unit of risk. Mainstay Large Cap is currently generating about 0.19 per unit of volatility. If you would invest  1,250  in Mainstay Large Cap on September 2, 2024 and sell it today you would earn a total of  159.00  from holding Mainstay Large Cap or generate 12.72% return on investment over 90 days.

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

Mainstay Winslow Large  vs.  Mainstay Large Cap

Mainstay Winslow Large

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mainstay Winslow Large are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak primary indicators, Mainstay Winslow may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Mainstay Large Cap

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mainstay Large Cap are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Mainstay Large may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Mainstay Winslow and Mainstay Large

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

The idea behind Mainstay Winslow Large and Mainstay Large Cap 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.