Correlation Between Mainstay Epoch and Federated Institutional
Can any of the company-specific risk be diversified away by investing in both Mainstay Epoch and Federated Institutional 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 Federated Institutional 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 Federated Institutional High, you can compare the effects of market volatilities on Mainstay Epoch and Federated Institutional 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 Federated Institutional. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Epoch and Federated Institutional.
Diversification Opportunities for Mainstay Epoch and Federated Institutional
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mainstay and FEDERATED is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Epoch International and Federated Institutional High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Institutional 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 Federated Institutional. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Institutional has no effect on the direction of Mainstay Epoch i.e., Mainstay Epoch and Federated Institutional go up and down completely randomly.
Pair Corralation between Mainstay Epoch and Federated Institutional
Assuming the 90 days horizon Mainstay Epoch International is expected to under-perform the Federated Institutional. In addition to that, Mainstay Epoch is 5.7 times more volatile than Federated Institutional High. It trades about -0.1 of its total potential returns per unit of risk. Federated Institutional High is currently generating about 0.12 per unit of volatility. If you would invest 892.00 in Federated Institutional High on September 2, 2024 and sell it today you would earn a total of 3.00 from holding Federated Institutional High or generate 0.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mainstay Epoch International vs. Federated Institutional High
Performance |
| Timeline |
| Mainstay Epoch Inter |
| Federated Institutional |
Mainstay Epoch and Federated Institutional Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay Epoch and Federated Institutional
The main advantage of trading using opposite Mainstay Epoch and Federated Institutional positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Epoch position performs unexpectedly, Federated Institutional 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 Federated Institutional will offset losses from the drop in Federated Institutional's long position.| Mainstay Epoch vs. Alliancebernstein Global High | Mainstay Epoch vs. Federated Institutional High | Mainstay Epoch vs. Strategic Allocation Aggressive | Mainstay Epoch vs. Metropolitan West High |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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