Correlation Between Mainstay Large and Mainstay Epoch
Can any of the company-specific risk be diversified away by investing in both Mainstay Large 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 Mainstay Large and Mainstay Epoch into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mainstay Large Cap and Mainstay Epoch Equity, you can compare the effects of market volatilities on Mainstay Large 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 Mainstay Large with a short position of Mainstay Epoch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Large and Mainstay Epoch.
Diversification Opportunities for Mainstay Large and Mainstay Epoch
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Mainstay and Mainstay is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Large Cap and Mainstay Epoch Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Epoch Equity and Mainstay Large 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 Large Cap 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 Equity has no effect on the direction of Mainstay Large i.e., Mainstay Large and Mainstay Epoch go up and down completely randomly.
Pair Corralation between Mainstay Large and Mainstay Epoch
Assuming the 90 days horizon Mainstay Large Cap is expected to generate 1.95 times more return on investment than Mainstay Epoch. However, Mainstay Large is 1.95 times more volatile than Mainstay Epoch Equity. It trades about 0.1 of its potential returns per unit of risk. Mainstay Epoch Equity is currently generating about 0.19 per unit of risk. If you would invest 860.00 in Mainstay Large Cap on September 1, 2024 and sell it today you would earn a total of 137.00 from holding Mainstay Large Cap or generate 15.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mainstay Large Cap vs. Mainstay Epoch Equity
Performance |
| Timeline |
| Mainstay Large Cap |
| Mainstay Epoch Equity |
Mainstay Large and Mainstay Epoch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay Large and Mainstay Epoch
The main advantage of trading using opposite Mainstay Large and Mainstay Epoch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Large 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.| Mainstay Large vs. Prudential Core Conservative | Mainstay Large vs. American Funds Conservative | Mainstay Large vs. Delaware Limited Term Diversified | Mainstay Large vs. Adams Diversified Equity |
| Mainstay Epoch vs. Mainstay Tax Free | Mainstay Epoch vs. Mainstay Large Cap | Mainstay Epoch vs. Mainstay Large Cap | 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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