Correlation Between Mainstay Conservative and Guidepath Growth

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

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

Diversification Opportunities for Mainstay Conservative and Guidepath Growth

0.99

Correlation Coefficient

Mainstay Conservative  Guidepath Growth

No risk reduction

The 3 months correlation between Mainstay and Guidepath is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Conservative Allocati and Guidepath Growth Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guidepath Growth All and Mainstay Conservative 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 Conservative Allocation are associated (or correlated) with Guidepath Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guidepath Growth All has no effect on the direction of Mainstay Conservative i.e., Mainstay Conservative and Guidepath Growth go up and down completely randomly.

Pair Corralation between Mainstay Conservative and Guidepath Growth

Assuming the 90 days horizon Mainstay Conservative is expected to generate 2.53 times less return on investment than Guidepath Growth. But when comparing it to its historical volatility, Mainstay Conservative Allocation is 2.11 times less risky than Guidepath Growth. It trades about 0.27 of its potential returns per unit of risk. Guidepath Growth Allocation is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest  1,696  in Guidepath Growth Allocation on April 24, 2025 and sell it today you would earn a total of  253.00  from holding Guidepath Growth Allocation or generate 14.92% return on investment over 90 days.

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

Mainstay Conservative Allocati  vs.  Guidepath Growth Allocation

Mainstay Conservative

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Mainstay Conservative Allocation are ranked lower than 21 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Mainstay Conservative is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Guidepath Growth All

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Guidepath Growth Allocation are ranked lower than 25 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Guidepath Growth showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mainstay Conservative and Guidepath Growth

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

The idea behind Mainstay Conservative Allocation and Guidepath Growth Allocation 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.