Correlation Between Mainstay Tax and Vanguard High
Can any of the company-specific risk be diversified away by investing in both Mainstay Tax and Vanguard High 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 Tax and Vanguard High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mainstay Tax Free and Vanguard High Yield Tax Exempt, you can compare the effects of market volatilities on Mainstay Tax and Vanguard High 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 Tax with a short position of Vanguard High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Tax and Vanguard High.
Diversification Opportunities for Mainstay Tax and Vanguard High
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Mainstay and Vanguard is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Tax Free and Vanguard High Yield Tax Exempt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard High Yield and Mainstay Tax 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 Tax Free are associated (or correlated) with Vanguard High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard High Yield has no effect on the direction of Mainstay Tax i.e., Mainstay Tax and Vanguard High go up and down completely randomly.
Pair Corralation between Mainstay Tax and Vanguard High
Assuming the 90 days horizon Mainstay Tax Free is expected to generate 0.85 times more return on investment than Vanguard High. However, Mainstay Tax Free is 1.18 times less risky than Vanguard High. It trades about -0.23 of its potential returns per unit of risk. Vanguard High Yield Tax Exempt is currently generating about -0.23 per unit of risk. If you would invest 940.00 in Mainstay Tax Free on January 20, 2024 and sell it today you would lose (9.00) from holding Mainstay Tax Free or give up 0.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mainstay Tax Free vs. Vanguard High Yield Tax Exempt
Performance |
| Timeline |
| Mainstay Tax Free |
| Vanguard High Yield |
Mainstay Tax and Vanguard High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay Tax and Vanguard High
The main advantage of trading using opposite Mainstay Tax and Vanguard High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Tax position performs unexpectedly, Vanguard High 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 Vanguard High will offset losses from the drop in Vanguard High's long position.| Mainstay Tax vs. Mainstay High Yield | Mainstay Tax vs. Mainstay Income Builder | Mainstay Tax vs. Mainstay Large Cap | Mainstay Tax vs. Mainstay Large Cap |
| Vanguard High vs. Vanguard Intermediate Term Tax Exempt | Vanguard High vs. Vanguard Limited Term Tax Exempt | Vanguard High vs. Vanguard High Yield Porate | Vanguard High vs. Vanguard Short Term Tax Exempt |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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