Correlation Between American Beacon and Mainstay
Can any of the company-specific risk be diversified away by investing in both American Beacon and Mainstay 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 American Beacon and Mainstay into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Beacon Ahl and Mainstay Sp 500, you can compare the effects of market volatilities on American Beacon and Mainstay 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 American Beacon with a short position of Mainstay. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Beacon and Mainstay.
Diversification Opportunities for American Beacon and Mainstay
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between American and Mainstay is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding American Beacon Ahl and Mainstay Sp 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Sp 500 and American Beacon 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 American Beacon Ahl are associated (or correlated) with Mainstay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Sp 500 has no effect on the direction of American Beacon i.e., American Beacon and Mainstay go up and down completely randomly.
Pair Corralation between American Beacon and Mainstay
Assuming the 90 days horizon American Beacon Ahl is expected to generate 0.96 times more return on investment than Mainstay. However, American Beacon Ahl is 1.04 times less risky than Mainstay. It trades about 0.12 of its potential returns per unit of risk. Mainstay Sp 500 is currently generating about 0.08 per unit of risk. If you would invest 961.00 in American Beacon Ahl on September 13, 2025 and sell it today you would earn a total of 56.00 from holding American Beacon Ahl or generate 5.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Beacon Ahl vs. Mainstay Sp 500
Performance |
| Timeline |
| American Beacon Ahl |
| Mainstay Sp 500 |
American Beacon and Mainstay Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Beacon and Mainstay
The main advantage of trading using opposite American Beacon and Mainstay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Beacon position performs unexpectedly, Mainstay 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 will offset losses from the drop in Mainstay's long position.| American Beacon vs. American Beacon Ahl | American Beacon vs. Siit Dynamic Asset | American Beacon vs. Income Growth Fund | American Beacon vs. Income Growth Fund |
| Mainstay vs. Nationwide Sp 500 | Mainstay vs. Fam Value Fund | Mainstay vs. Lazard International Strategic | Mainstay vs. Lazard International Strategic |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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