Correlation Between Strategic Allocation and Mainstay Moderate

Can any of the company-specific risk be diversified away by investing in both Strategic Allocation and Mainstay Moderate 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 Strategic Allocation and Mainstay Moderate into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Strategic Allocation Moderate and Mainstay Moderate Etf, you can compare the effects of market volatilities on Strategic Allocation and Mainstay Moderate 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 Strategic Allocation with a short position of Mainstay Moderate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strategic Allocation and Mainstay Moderate.

Diversification Opportunities for Strategic Allocation and Mainstay Moderate

0.63

Correlation Coefficient

Strategic Allocation  Mainstay Moderate

Poor diversification

The 3 months correlation between Strategic and Mainstay is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Strategic Allocation Moderate and Mainstay Moderate Etf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Moderate Etf and Strategic Allocation 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 Strategic Allocation Moderate are associated (or correlated) with Mainstay Moderate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Moderate Etf has no effect on the direction of Strategic Allocation i.e., Strategic Allocation and Mainstay Moderate go up and down completely randomly.

Pair Corralation between Strategic Allocation and Mainstay Moderate

Assuming the 90 days horizon Strategic Allocation Moderate is expected to generate 1.07 times more return on investment than Mainstay Moderate. However, Strategic Allocation is 1.07 times more volatile than Mainstay Moderate Etf. It trades about 0.29 of its potential returns per unit of risk. Mainstay Moderate Etf is currently generating about 0.26 per unit of risk. If you would invest  637.00  in Strategic Allocation Moderate on May 1, 2025 and sell it today you would earn a total of  54.00  from holding Strategic Allocation Moderate or generate 8.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.39%
Values	Daily Returns

Strategic Allocation Moderate  vs.  Mainstay Moderate Etf

Strategic Allocation

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Strategic Allocation Moderate are ranked lower than 22 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Strategic Allocation may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Mainstay Moderate Etf

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Mainstay Moderate Etf are ranked lower than 20 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward-looking signals, Mainstay Moderate may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Strategic Allocation and Mainstay Moderate

The main advantage of trading using opposite Strategic Allocation and Mainstay Moderate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strategic Allocation position performs unexpectedly, Mainstay Moderate 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 Moderate will offset losses from the drop in Mainstay Moderate's long position.

The idea behind Strategic Allocation Moderate and Mainstay Moderate Etf 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.

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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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.