diversifiable risk of combining Mainstay Conservative and Franklin Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mainstay Conservative Etf and Franklin Income, you can compare the effects of market volatilities on Mainstay Conservative and Franklin Income 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 Conservative with a short position of Franklin Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Conservative and Franklin Income.
Diversification Opportunities for Mainstay Conservative and Franklin Income
Pair Corralation between Mainstay Conservative and Franklin Income
Assuming the 90 days horizon Mainstay Conservative Etf is expected to generate 1.07 times more return on investment than Franklin Income. However, Mainstay Conservative is 1.07 times more volatile than Franklin Income. It trades about 0.17 of its potential returns per unit of risk. Franklin Income is currently generating about 0.13 per unit of risk. If you would invest 960.00 in Mainstay Conservative Etf on December 3, 2023 and sell it today you would earn a total of 88.00 from holding Mainstay Conservative Etf or generate 9.17% return on investment over 90 days.
MainStay Conservative ETF vs. Franklin Income
Mainstay Conservative and Franklin Income Volatility Contrast
Pair Trading with Mainstay Conservative and Franklin IncomeThe main advantage of trading using opposite Mainstay Conservative and Franklin Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Conservative position performs unexpectedly, Franklin Income 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 Franklin Income will offset losses from the drop in Franklin Income's long position. The idea behind Mainstay Conservative Etf and Franklin Income 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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