Correlation Between Small Cap and Mainstay Epoch
Can any of the company-specific risk be diversified away by investing in both Small Cap 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 Small Cap and Mainstay Epoch into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Small Cap Value and Mainstay Epoch Small, you can compare the effects of market volatilities on Small Cap 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 Small Cap with a short position of Mainstay Epoch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Small Cap and Mainstay Epoch.
Diversification Opportunities for Small Cap and Mainstay Epoch
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Small and Mainstay is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Small Cap Value and Mainstay Epoch Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Epoch Small and Small Cap 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 Small Cap Value 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 Small has no effect on the direction of Small Cap i.e., Small Cap and Mainstay Epoch go up and down completely randomly.
Pair Corralation between Small Cap and Mainstay Epoch
Assuming the 90 days horizon Small Cap is expected to generate 1.82 times less return on investment than Mainstay Epoch. But when comparing it to its historical volatility, Small Cap Value is 1.27 times less risky than Mainstay Epoch. It trades about 0.05 of its potential returns per unit of risk. Mainstay Epoch Small is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,050 in Mainstay Epoch Small on September 13, 2024 and sell it today you would earn a total of 30.00 from holding Mainstay Epoch Small or generate 1.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Small Cap Value vs. Mainstay Epoch Small
Performance |
| Timeline |
| Small Cap Value |
| Mainstay Epoch Small |
Small Cap and Mainstay Epoch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Small Cap and Mainstay Epoch
The main advantage of trading using opposite Small Cap and Mainstay Epoch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Small Cap 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.| Small Cap vs. Blackrock Financial Institutions | Small Cap vs. Icon Financial Fund | Small Cap vs. Fidelity Advisor Financial | Small Cap vs. Vanguard Financials Index |
| Mainstay Epoch vs. Mainstay High Yield | Mainstay Epoch vs. Mainstay Tax Free | Mainstay Epoch vs. Mainstay Income Builder | Mainstay Epoch vs. Mainstay Large Cap |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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