Correlation Between Pace Municipal and Mainstay Epoch
Can any of the company-specific risk be diversified away by investing in both Pace Municipal 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 Pace Municipal and Mainstay Epoch into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pace Municipal Fixed and Mainstay Epoch Global, you can compare the effects of market volatilities on Pace Municipal 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 Pace Municipal with a short position of Mainstay Epoch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pace Municipal and Mainstay Epoch.
Diversification Opportunities for Pace Municipal and Mainstay Epoch
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Pace and Mainstay is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Pace Municipal Fixed and Mainstay Epoch Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Epoch Global and Pace Municipal 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 Pace Municipal Fixed 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 Global has no effect on the direction of Pace Municipal i.e., Pace Municipal and Mainstay Epoch go up and down completely randomly.
Pair Corralation between Pace Municipal and Mainstay Epoch
Assuming the 90 days horizon Pace Municipal Fixed is expected to generate 0.07 times more return on investment than Mainstay Epoch. However, Pace Municipal Fixed is 13.48 times less risky than Mainstay Epoch. It trades about 0.49 of its potential returns per unit of risk. Mainstay Epoch Global is currently generating about -0.24 per unit of risk. If you would invest 1,218 in Pace Municipal Fixed on September 12, 2024 and sell it today you would earn a total of 14.00 from holding Pace Municipal Fixed or generate 1.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pace Municipal Fixed vs. Mainstay Epoch Global
Performance |
| Timeline |
| Pace Municipal Fixed |
| Mainstay Epoch Global |
Pace Municipal and Mainstay Epoch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pace Municipal and Mainstay Epoch
The main advantage of trading using opposite Pace Municipal and Mainstay Epoch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pace Municipal 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.| Pace Municipal vs. Scharf Global Opportunity | Pace Municipal vs. Ab Value Fund | Pace Municipal vs. Arrow Managed Futures | Pace Municipal vs. Materials Portfolio Fidelity |
| Mainstay Epoch vs. Old Westbury Municipal | Mainstay Epoch vs. Ishares Municipal Bond | Mainstay Epoch vs. Transamerica Intermediate Muni | Mainstay Epoch vs. Pace Municipal Fixed |
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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