Correlation Between Mainstay Government and Intermediate Government
Can any of the company-specific risk be diversified away by investing in both Mainstay Government and Intermediate Government 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 Government and Intermediate Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mainstay Government Fund and Intermediate Government Bond, you can compare the effects of market volatilities on Mainstay Government and Intermediate Government 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 Government with a short position of Intermediate Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Government and Intermediate Government.
Diversification Opportunities for Mainstay Government and Intermediate Government
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mainstay and Intermediate is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Government Fund and Intermediate Government Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intermediate Government and Mainstay Government 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 Government Fund are associated (or correlated) with Intermediate Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intermediate Government has no effect on the direction of Mainstay Government i.e., Mainstay Government and Intermediate Government go up and down completely randomly.
Pair Corralation between Mainstay Government and Intermediate Government
Assuming the 90 days horizon Mainstay Government Fund is expected to generate 2.89 times more return on investment than Intermediate Government. However, Mainstay Government is 2.89 times more volatile than Intermediate Government Bond. It trades about 0.05 of its potential returns per unit of risk. Intermediate Government Bond is currently generating about 0.1 per unit of risk. If you would invest 747.00 in Mainstay Government Fund on March 18, 2025 and sell it today you would earn a total of 8.00 from holding Mainstay Government Fund or generate 1.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mainstay Government Fund vs. Intermediate Government Bond
Performance |
| Timeline |
| Mainstay Government |
| Intermediate Government |
Mainstay Government and Intermediate Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay Government and Intermediate Government
The main advantage of trading using opposite Mainstay Government and Intermediate Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Government position performs unexpectedly, Intermediate Government 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 Intermediate Government will offset losses from the drop in Intermediate Government's long position.| Mainstay Government vs. Gmo Quality Fund | Mainstay Government vs. Rational Special Situations | Mainstay Government vs. Qs Growth Fund | Mainstay Government vs. Alternative Asset Allocation |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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