Correlation Between Inflation-protected and Mainstay Epoch
Can any of the company-specific risk be diversified away by investing in both Inflation-protected 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 Inflation-protected and Mainstay Epoch into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inflation Protected Bond Fund and Mainstay Epoch Global, you can compare the effects of market volatilities on Inflation-protected 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 Inflation-protected with a short position of Mainstay Epoch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inflation-protected and Mainstay Epoch.
Diversification Opportunities for Inflation-protected and Mainstay Epoch
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Inflation-protected and Mainstay is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Inflation Protected Bond Fund and Mainstay Epoch Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Epoch Global and Inflation-protected 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 Inflation Protected Bond 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 Global has no effect on the direction of Inflation-protected i.e., Inflation-protected and Mainstay Epoch go up and down completely randomly.
Pair Corralation between Inflation-protected and Mainstay Epoch
Assuming the 90 days horizon Inflation-protected is expected to generate 1.23 times less return on investment than Mainstay Epoch. But when comparing it to its historical volatility, Inflation Protected Bond Fund is 1.29 times less risky than Mainstay Epoch. It trades about 0.14 of its potential returns per unit of risk. Mainstay Epoch Global is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 2,218 in Mainstay Epoch Global on September 2, 2024 and sell it today you would earn a total of 245.00 from holding Mainstay Epoch Global or generate 11.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inflation Protected Bond Fund vs. Mainstay Epoch Global
Performance |
| Timeline |
| Inflation Protected |
| Mainstay Epoch Global |
Inflation-protected and Mainstay Epoch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inflation-protected and Mainstay Epoch
The main advantage of trading using opposite Inflation-protected and Mainstay Epoch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inflation-protected 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.| Inflation-protected vs. Wells Fargo Advantage | Inflation-protected vs. Wells Fargo Advantage | Inflation-protected vs. Wells Fargo Advantage | Inflation-protected vs. Wells Fargo Ultra |
| 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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