Correlation Between Mainstay Conservative and Franklin Income

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Can any of the company-specific risk be diversified away by investing in both Mainstay Conservative and Franklin Income 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 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

0.85
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Mainstay and Franklin is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding MainStay Conservative ETF and Franklin Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Income and Mainstay Conservative 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 Conservative Etf are associated (or correlated) with Franklin Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Income has no effect on the direction of Mainstay Conservative i.e., Mainstay Conservative and Franklin Income go up and down completely randomly.

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.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

MainStay Conservative ETF  vs.  Franklin Income

 Performance 
       Timeline  
Mainstay Conservative Etf 

Risk-Adjusted Performance

8 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Mainstay Conservative Etf are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Mainstay Conservative is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Franklin Income 

Risk-Adjusted Performance

6 of 100

 
Low
 
High
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Franklin Income are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Franklin Income is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Mainstay Conservative and Franklin Income Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Mainstay Conservative and Franklin Income

The 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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