Correlation Between Arrow Managed and Mainstay Epoch
Can any of the company-specific risk be diversified away by investing in both Arrow Managed 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 Arrow Managed and Mainstay Epoch into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arrow Managed Futures and Mainstay Epoch International, you can compare the effects of market volatilities on Arrow Managed 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 Arrow Managed with a short position of Mainstay Epoch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arrow Managed and Mainstay Epoch.
Diversification Opportunities for Arrow Managed and Mainstay Epoch
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Arrow and Mainstay is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Arrow Managed Futures and Mainstay Epoch International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Epoch Inter and Arrow Managed 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 Arrow Managed Futures 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 Inter has no effect on the direction of Arrow Managed i.e., Arrow Managed and Mainstay Epoch go up and down completely randomly.
Pair Corralation between Arrow Managed and Mainstay Epoch
Assuming the 90 days horizon Arrow Managed Futures is expected to generate 1.63 times more return on investment than Mainstay Epoch. However, Arrow Managed is 1.63 times more volatile than Mainstay Epoch International. It trades about 0.22 of its potential returns per unit of risk. Mainstay Epoch International is currently generating about -0.1 per unit of risk. If you would invest 529.00 in Arrow Managed Futures on September 2, 2024 and sell it today you would earn a total of 29.00 from holding Arrow Managed Futures or generate 5.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arrow Managed Futures vs. Mainstay Epoch International
Performance |
| Timeline |
| Arrow Managed Futures |
| Mainstay Epoch Inter |
Arrow Managed and Mainstay Epoch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arrow Managed and Mainstay Epoch
The main advantage of trading using opposite Arrow Managed and Mainstay Epoch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arrow Managed 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.| Arrow Managed vs. Fidelity Advisor Technology | Arrow Managed vs. Biotechnology Ultrasector Profund | Arrow Managed vs. Biotechnology Fund Class |
| 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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