Correlation Between Mainstay Moderate and Mainstay Epoch
Can any of the company-specific risk be diversified away by investing in both Mainstay Moderate 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 Moderate 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 Moderate Allocation and Mainstay Epoch Equity, you can compare the effects of market volatilities on Mainstay Moderate 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 Moderate with a short position of Mainstay Epoch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Moderate and Mainstay Epoch.
Diversification Opportunities for Mainstay Moderate and Mainstay Epoch
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Mainstay and Mainstay is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Moderate Allocation 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 Moderate 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 Moderate Allocation 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 Moderate i.e., Mainstay Moderate and Mainstay Epoch go up and down completely randomly.
Pair Corralation between Mainstay Moderate and Mainstay Epoch
Assuming the 90 days horizon Mainstay Moderate is expected to generate 1.31 times less return on investment than Mainstay Epoch. But when comparing it to its historical volatility, Mainstay Moderate Allocation is 1.35 times less risky than Mainstay Epoch. It trades about 0.09 of its potential returns per unit of risk. Mainstay Epoch Equity is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,829 in Mainstay Epoch Equity on September 3, 2024 and sell it today you would earn a total of 584.00 from holding Mainstay Epoch Equity or generate 31.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mainstay Moderate Allocation vs. Mainstay Epoch Equity
Performance |
| Timeline |
| Mainstay Moderate |
| Mainstay Epoch Equity |
Mainstay Moderate and Mainstay Epoch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay Moderate and Mainstay Epoch
The main advantage of trading using opposite Mainstay Moderate and Mainstay Epoch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Moderate 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 Moderate vs. Lgm Risk Managed | Mainstay Moderate vs. Ab High Income | Mainstay Moderate vs. Morningstar Aggressive Growth | Mainstay Moderate vs. Goldman Sachs High |
| Mainstay Epoch vs. Semiconductor Ultrasector Profund | Mainstay Epoch vs. William Blair Large | Mainstay Epoch vs. Fm Investments Large | Mainstay Epoch vs. Principal Lifetime Hybrid |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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