Correlation Between Mondrian Emerging and Mainstay Epoch
Can any of the company-specific risk be diversified away by investing in both Mondrian Emerging 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 Mondrian Emerging and Mainstay Epoch into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mondrian Emerging Markets and Mainstay Epoch Equity, you can compare the effects of market volatilities on Mondrian Emerging 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 Mondrian Emerging with a short position of Mainstay Epoch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mondrian Emerging and Mainstay Epoch.
Diversification Opportunities for Mondrian Emerging and Mainstay Epoch
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Mondrian and Mainstay is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Mondrian Emerging Markets 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 Mondrian Emerging 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 Mondrian Emerging Markets 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 Mondrian Emerging i.e., Mondrian Emerging and Mainstay Epoch go up and down completely randomly.
Pair Corralation between Mondrian Emerging and Mainstay Epoch
Assuming the 90 days horizon Mondrian Emerging Markets is expected to under-perform the Mainstay Epoch. In addition to that, Mondrian Emerging is 1.09 times more volatile than Mainstay Epoch Equity. It trades about -0.22 of its total potential returns per unit of risk. Mainstay Epoch Equity is currently generating about 0.32 per unit of volatility. If you would invest 2,333 in Mainstay Epoch Equity on September 4, 2024 and sell it today you would earn a total of 109.00 from holding Mainstay Epoch Equity or generate 4.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mondrian Emerging Markets vs. Mainstay Epoch Equity
Performance |
| Timeline |
| Mondrian Emerging Markets |
| Mainstay Epoch Equity |
Mondrian Emerging and Mainstay Epoch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mondrian Emerging and Mainstay Epoch
The main advantage of trading using opposite Mondrian Emerging and Mainstay Epoch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mondrian Emerging 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.| Mondrian Emerging vs. Mondrian Global Equity | Mondrian Emerging vs. Mondrian International Value | Mondrian Emerging vs. Mondrian Global Listed | Mondrian Emerging vs. Q3 All Weather Sector |
| 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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