Correlation Between Mainstay Epoch and Baron Health
Can any of the company-specific risk be diversified away by investing in both Mainstay Epoch and Baron Health 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 Baron Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mainstay Epoch International and Baron Health Care, you can compare the effects of market volatilities on Mainstay Epoch and Baron Health 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 Baron Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Epoch and Baron Health.
Diversification Opportunities for Mainstay Epoch and Baron Health
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mainstay and Baron is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Epoch International and Baron Health Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baron Health Care 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 International are associated (or correlated) with Baron Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baron Health Care has no effect on the direction of Mainstay Epoch i.e., Mainstay Epoch and Baron Health go up and down completely randomly.
Pair Corralation between Mainstay Epoch and Baron Health
Assuming the 90 days horizon Mainstay Epoch is expected to generate 1.63 times less return on investment than Baron Health. But when comparing it to its historical volatility, Mainstay Epoch International is 1.1 times less risky than Baron Health. It trades about 0.03 of its potential returns per unit of risk. Baron Health Care is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,781 in Baron Health Care on September 3, 2024 and sell it today you would earn a total of 294.00 from holding Baron Health Care or generate 16.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mainstay Epoch International vs. Baron Health Care
Performance |
| Timeline |
| Mainstay Epoch Inter |
| Baron Health Care |
Mainstay Epoch and Baron Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay Epoch and Baron Health
The main advantage of trading using opposite Mainstay Epoch and Baron Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Epoch position performs unexpectedly, Baron Health 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 Baron Health will offset losses from the drop in Baron Health's long position.| Mainstay Epoch vs. Franklin Natural Resources | Mainstay Epoch vs. Energy Basic Materials | Mainstay Epoch vs. Icon Natural Resources | Mainstay Epoch vs. World Energy Fund |
| Baron Health vs. Vanguard Health Care | Baron Health vs. Vanguard Health Care | Baron Health vs. T Rowe Price | Baron Health vs. T Rowe Price |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |