Correlation Between Mainstay Epoch and Red Oak
Can any of the company-specific risk be diversified away by investing in both Mainstay Epoch and Red Oak 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 Epoch and Red Oak into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mainstay Epoch Equity and Red Oak Technology, you can compare the effects of market volatilities on Mainstay Epoch and Red Oak 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 Epoch with a short position of Red Oak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Epoch and Red Oak.
Diversification Opportunities for Mainstay Epoch and Red Oak
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Mainstay and Red is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Epoch Equity and Red Oak Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Red Oak Technology and Mainstay Epoch 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 Epoch Equity are associated (or correlated) with Red Oak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Red Oak Technology has no effect on the direction of Mainstay Epoch i.e., Mainstay Epoch and Red Oak go up and down completely randomly.
Pair Corralation between Mainstay Epoch and Red Oak
Assuming the 90 days horizon Mainstay Epoch is expected to generate 1.82 times less return on investment than Red Oak. But when comparing it to its historical volatility, Mainstay Epoch Equity is 1.57 times less risky than Red Oak. It trades about 0.08 of its potential returns per unit of risk. Red Oak Technology is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 3,732 in Red Oak Technology on September 15, 2024 and sell it today you would earn a total of 1,301 from holding Red Oak Technology or generate 34.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.63% |
| Values | Daily Returns |
Mainstay Epoch Equity vs. Red Oak Technology
Performance |
| Timeline |
| Mainstay Epoch Equity |
| Red Oak Technology |
Mainstay Epoch and Red Oak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay Epoch and Red Oak
The main advantage of trading using opposite Mainstay Epoch and Red Oak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Epoch position performs unexpectedly, Red Oak 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 Red Oak will offset losses from the drop in Red Oak's long position.| Mainstay Epoch vs. Red Oak Technology | Mainstay Epoch vs. Towpath Technology | Mainstay Epoch vs. Fidelity Advisor Technology | Mainstay Epoch vs. Dreyfus Technology Growth |
| Red Oak vs. Pin Oak Equity | Red Oak vs. White Oak Select | Red Oak vs. Black Oak Emerging | Red Oak vs. Berkshire Focus |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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