Correlation Between Mainstay Balanced and Astonherndon Large

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

By analyzing existing cross correlation between Mainstay Balanced Fund and Astonherndon Large Cap, you can compare the effects of market volatilities on Mainstay Balanced and Astonherndon 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 Mainstay Balanced with a short position of Astonherndon Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Balanced and Astonherndon Large.

Diversification Opportunities for Mainstay Balanced and Astonherndon Large

0.97

Correlation Coefficient

Mainstay Balanced  Astonherndon Large

Almost no diversification

The 3 months correlation between Mainstay and Astonherndon is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Balanced Fund and Astonherndon Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astonherndon Large Cap and Mainstay Balanced 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 Balanced Fund are associated (or correlated) with Astonherndon Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astonherndon Large Cap has no effect on the direction of Mainstay Balanced i.e., Mainstay Balanced and Astonherndon Large go up and down completely randomly.

Pair Corralation between Mainstay Balanced and Astonherndon Large

Assuming the 90 days horizon Mainstay Balanced is expected to generate 3.66 times less return on investment than Astonherndon Large. But when comparing it to its historical volatility, Mainstay Balanced Fund is 1.37 times less risky than Astonherndon Large. It trades about 0.1 of its potential returns per unit of risk. Astonherndon Large Cap is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest  1,112  in Astonherndon Large Cap on May 5, 2025 and sell it today you would earn a total of  119.00  from holding Astonherndon Large Cap or generate 10.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Mainstay Balanced Fund  vs.  Astonherndon Large Cap

Mainstay Balanced

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mainstay Balanced Fund are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Mainstay Balanced is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Astonherndon Large Cap

Risk-Adjusted Performance

Solid

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

Pair Trading with Mainstay Balanced and Astonherndon Large

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

The idea behind Mainstay Balanced Fund and Astonherndon Large Cap 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.

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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.