Correlation Between Mainstay Government and Rbc Emerging
Can any of the company-specific risk be diversified away by investing in both Mainstay Government and Rbc Emerging 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 Rbc Emerging 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 Rbc Emerging Markets, you can compare the effects of market volatilities on Mainstay Government and Rbc Emerging 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 Rbc Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Government and Rbc Emerging.
Diversification Opportunities for Mainstay Government and Rbc Emerging
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mainstay and Rbc is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Government Fund and Rbc Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rbc Emerging Markets 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 Rbc Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rbc Emerging Markets has no effect on the direction of Mainstay Government i.e., Mainstay Government and Rbc Emerging go up and down completely randomly.
Pair Corralation between Mainstay Government and Rbc Emerging
Assuming the 90 days horizon Mainstay Government is expected to generate 2.44 times less return on investment than Rbc Emerging. But when comparing it to its historical volatility, Mainstay Government Fund is 2.59 times less risky than Rbc Emerging. It trades about 0.18 of its potential returns per unit of risk. Rbc Emerging Markets is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 1,456 in Rbc Emerging Markets on May 28, 2025 and sell it today you would earn a total of 116.00 from holding Rbc Emerging Markets or generate 7.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mainstay Government Fund vs. Rbc Emerging Markets
Performance |
| Timeline |
| Mainstay Government |
| Rbc Emerging Markets |
Mainstay Government and Rbc Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay Government and Rbc Emerging
The main advantage of trading using opposite Mainstay Government and Rbc Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Government position performs unexpectedly, Rbc Emerging 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 Rbc Emerging will offset losses from the drop in Rbc Emerging's long position.| Mainstay Government vs. Auxier Focus Fund | Mainstay Government vs. Growth Allocation Fund | Mainstay Government vs. Eic Value Fund | Mainstay Government vs. Gmo Quality Fund |
| Rbc Emerging vs. Barings High Yield | Rbc Emerging vs. Transamerica High Yield | Rbc Emerging vs. Morningstar Aggressive Growth | Rbc Emerging vs. Siit High Yield |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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