Correlation Between Mainstay and Mainstay Epoch
Can any of the company-specific risk be diversified away by investing in both Mainstay 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 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 Sp 500 and Mainstay Epoch Small, you can compare the effects of market volatilities on Mainstay 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 with a short position of Mainstay Epoch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay and Mainstay Epoch.
Diversification Opportunities for Mainstay and Mainstay Epoch
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mainstay and Mainstay is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Sp 500 and Mainstay Epoch Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Epoch Small and Mainstay 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 Sp 500 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 Small has no effect on the direction of Mainstay i.e., Mainstay and Mainstay Epoch go up and down completely randomly.
Pair Corralation between Mainstay and Mainstay Epoch
Assuming the 90 days horizon Mainstay is expected to generate 4.01 times less return on investment than Mainstay Epoch. But when comparing it to its historical volatility, Mainstay Sp 500 is 2.02 times less risky than Mainstay Epoch. It trades about 0.16 of its potential returns per unit of risk. Mainstay Epoch Small is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 2,445 in Mainstay Epoch Small on August 28, 2024 and sell it today you would earn a total of 298.00 from holding Mainstay Epoch Small or generate 12.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mainstay Sp 500 vs. Mainstay Epoch Small
Performance |
| Timeline |
| Mainstay Sp 500 |
| Mainstay Epoch Small |
Mainstay and Mainstay Epoch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay and Mainstay Epoch
The main advantage of trading using opposite Mainstay and Mainstay Epoch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay 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 vs. Qs Large Cap | Mainstay vs. Omni Small Cap Value | Mainstay vs. Ab Global Risk | Mainstay vs. Small Cap Stock |
| Mainstay Epoch vs. Nuveen Minnesota Municipal | Mainstay Epoch vs. Baird Strategic Municipal | Mainstay Epoch vs. Franklin High Yield | Mainstay Epoch vs. Vanguard Short Term Government |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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