Correlation Between World Energy and Mainstay Epoch
Can any of the company-specific risk be diversified away by investing in both World Energy and Mainstay Epoch 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 World Energy and Mainstay Epoch into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between World Energy Fund and Mainstay Epoch International, you can compare the effects of market volatilities on World Energy and Mainstay Epoch 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 World Energy with a short position of Mainstay Epoch. Check out your portfolio center. Please also check ongoing floating volatility patterns of World Energy and Mainstay Epoch.
Diversification Opportunities for World Energy and Mainstay Epoch
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between World and Mainstay is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding World Energy Fund and Mainstay Epoch International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Epoch Inter and World Energy 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 World Energy Fund are associated (or correlated) with Mainstay Epoch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Epoch Inter has no effect on the direction of World Energy i.e., World Energy and Mainstay Epoch go up and down completely randomly.
Pair Corralation between World Energy and Mainstay Epoch
Assuming the 90 days horizon World Energy Fund is expected to generate 1.77 times more return on investment than Mainstay Epoch. However, World Energy is 1.77 times more volatile than Mainstay Epoch International. It trades about 0.31 of its potential returns per unit of risk. Mainstay Epoch International is currently generating about -0.13 per unit of risk. If you would invest 1,405 in World Energy Fund on September 4, 2024 and sell it today you would earn a total of 123.00 from holding World Energy Fund or generate 8.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
World Energy Fund vs. Mainstay Epoch International
Performance |
| Timeline |
| World Energy |
| Mainstay Epoch Inter |
World Energy and Mainstay Epoch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with World Energy and Mainstay Epoch
The main advantage of trading using opposite World Energy and Mainstay Epoch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if World Energy position performs unexpectedly, Mainstay Epoch 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 Epoch will offset losses from the drop in Mainstay Epoch's long position.| World Energy vs. Vanguard Financials Index | World Energy vs. 1919 Financial Services | World Energy vs. Fidelity Advisor Financial | World Energy vs. Blackrock Financial Institutions |
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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