Correlation Between Sprott Gold and Mainstay Cornerstone

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

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

Diversification Opportunities for Sprott Gold and Mainstay Cornerstone

0.33

Correlation Coefficient

Sprott Gold  Mainstay Cornerstone

Weak diversification

The 3 months correlation between Sprott and Mainstay is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Sprott Gold Equity and Mainstay Nerstone Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Nerstone Growth and Sprott Gold 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 Sprott Gold Equity are associated (or correlated) with Mainstay Cornerstone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Nerstone Growth has no effect on the direction of Sprott Gold i.e., Sprott Gold and Mainstay Cornerstone go up and down completely randomly.

Pair Corralation between Sprott Gold and Mainstay Cornerstone

Assuming the 90 days horizon Sprott Gold is expected to generate 1.29 times less return on investment than Mainstay Cornerstone. In addition to that, Sprott Gold is 1.72 times more volatile than Mainstay Nerstone Growth. It trades about 0.07 of its total potential returns per unit of risk. Mainstay Nerstone Growth is currently generating about 0.17 per unit of volatility. If you would invest  4,601  in Mainstay Nerstone Growth on September 4, 2024 and sell it today you would earn a total of  494.00  from holding Mainstay Nerstone Growth or generate 10.74% return on investment over 90 days.

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

Sprott Gold Equity  vs.  Mainstay Nerstone Growth

Sprott Gold Equity

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Sprott Gold Equity are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly sluggish essential indicators, Sprott Gold may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Mainstay Nerstone Growth

Risk-Adjusted Performance

13 of 100

Good

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

Pair Trading with Sprott Gold and Mainstay Cornerstone

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

The idea behind Sprott Gold Equity and Mainstay Nerstone Growth 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.