Correlation Between Adams Natural and Mainstay Epoch
Can any of the company-specific risk be diversified away by investing in both Adams Natural 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 Adams Natural and Mainstay Epoch into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adams Natural Resources and Mainstay Epoch Global, you can compare the effects of market volatilities on Adams Natural 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 Adams Natural with a short position of Mainstay Epoch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adams Natural and Mainstay Epoch.
Diversification Opportunities for Adams Natural and Mainstay Epoch
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Adams and Mainstay is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Adams Natural Resources 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 Adams Natural 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 Adams Natural Resources 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 Adams Natural i.e., Adams Natural and Mainstay Epoch go up and down completely randomly.
Pair Corralation between Adams Natural and Mainstay Epoch
Considering the 90-day investment horizon Adams Natural Resources is expected to generate 0.64 times more return on investment than Mainstay Epoch. However, Adams Natural Resources is 1.56 times less risky than Mainstay Epoch. It trades about -0.22 of its potential returns per unit of risk. Mainstay Epoch Global is currently generating about -0.21 per unit of risk. If you would invest 2,339 in Adams Natural Resources on September 14, 2024 and sell it today you would lose (104.00) from holding Adams Natural Resources or give up 4.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Adams Natural Resources vs. Mainstay Epoch Global
Performance |
| Timeline |
| Adams Natural Resources |
| Mainstay Epoch Global |
Adams Natural and Mainstay Epoch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adams Natural and Mainstay Epoch
The main advantage of trading using opposite Adams Natural and Mainstay Epoch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adams Natural 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.| Adams Natural vs. Liberty All Star | Adams Natural vs. Tri Continental Closed | Adams Natural vs. Royce Value Closed | Adams Natural vs. Central Securities |
| Mainstay Epoch vs. Calvert Global Energy | Mainstay Epoch vs. Adams Natural Resources | Mainstay Epoch vs. Thrivent Natural Resources | Mainstay Epoch vs. Alpsalerian Energy Infrastructure |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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