Correlation Between Mainstay Indexed and American Freedom

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

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

Diversification Opportunities for Mainstay Indexed and American Freedom

0.0

Correlation Coefficient

Mainstay Indexed  American Freedom

Pay attention - limited upside

The 3 months correlation between Mainstay and American is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Indexed Bond and American Freedom Government in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Freedom Gov and Mainstay Indexed 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 Indexed Bond are associated (or correlated) with American Freedom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Freedom Gov has no effect on the direction of Mainstay Indexed i.e., Mainstay Indexed and American Freedom go up and down completely randomly.

Pair Corralation between Mainstay Indexed and American Freedom

If you would invest  901.00  in Mainstay Indexed Bond on March 7, 2024 and sell it today you would earn a total of  4.00  from holding Mainstay Indexed Bond or generate 0.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Mainstay Indexed Bond  vs.  American Freedom Government

Mainstay Indexed Bond

Risk-Adjusted Performance

7 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Mainstay Indexed Bond are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Mainstay Indexed is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

American Freedom Gov

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days American Freedom Government has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, American Freedom is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Mainstay Indexed and American Freedom

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

The idea behind Mainstay Indexed Bond and American Freedom Government 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.