Correlation Between Equity Income and Mainstay Large
Can any of the company-specific risk be diversified away by investing in both Equity Income and Mainstay Large 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 Equity Income and Mainstay Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Equity Income Fund and Mainstay Large Cap, you can compare the effects of market volatilities on Equity Income and Mainstay Large 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 Equity Income with a short position of Mainstay Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equity Income and Mainstay Large.
Diversification Opportunities for Equity Income and Mainstay Large
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Equity and Mainstay is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Equity Income Fund and Mainstay Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Large Cap and Equity Income 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 Equity Income Fund are associated (or correlated) with Mainstay Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Large Cap has no effect on the direction of Equity Income i.e., Equity Income and Mainstay Large go up and down completely randomly.
Pair Corralation between Equity Income and Mainstay Large
Assuming the 90 days horizon Equity Income Fund is expected to under-perform the Mainstay Large. But the mutual fund apears to be less risky and, when comparing its historical volatility, Equity Income Fund is 1.4 times less risky than Mainstay Large. The mutual fund trades about -0.07 of its potential returns per unit of risk. The Mainstay Large Cap is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 1,028 in Mainstay Large Cap on March 21, 2024 and sell it today you would earn a total of 66.00 from holding Mainstay Large Cap or generate 6.42% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Equity Income Fund vs. Mainstay Large Cap
Performance |
Timeline |
Equity Income |
Mainstay Large Cap |
Equity Income and Mainstay Large Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Equity Income and Mainstay Large
The main advantage of trading using opposite Equity Income and Mainstay Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equity Income position performs unexpectedly, Mainstay Large 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 Large will offset losses from the drop in Mainstay Large's long position.Equity Income vs. Dodge Cox Stock | Equity Income vs. American Mutual Fund | Equity Income vs. Dodge Stock Fund | Equity Income vs. Vanguard Value Index |
Mainstay Large vs. American Funds The | Mainstay Large vs. American Funds The | Mainstay Large vs. Growth Fund Of | Mainstay Large vs. Growth Fund Of |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |