Correlation Between T Rowe and Mainstay Epoch
Can any of the company-specific risk be diversified away by investing in both T Rowe 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 T Rowe and Mainstay Epoch into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between T Rowe Price and Mainstay Epoch Global, you can compare the effects of market volatilities on T Rowe 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 T Rowe with a short position of Mainstay Epoch. Check out your portfolio center. Please also check ongoing floating volatility patterns of T Rowe and Mainstay Epoch.
Diversification Opportunities for T Rowe and Mainstay Epoch
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PRAFX and Mainstay is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding T Rowe Price 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 T Rowe 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 T Rowe Price 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 T Rowe i.e., T Rowe and Mainstay Epoch go up and down completely randomly.
Pair Corralation between T Rowe and Mainstay Epoch
Assuming the 90 days horizon T Rowe is expected to generate 1.35 times less return on investment than Mainstay Epoch. In addition to that, T Rowe is 1.27 times more volatile than Mainstay Epoch Global. It trades about 0.03 of its total potential returns per unit of risk. Mainstay Epoch Global is currently generating about 0.05 per unit of volatility. If you would invest 1,990 in Mainstay Epoch Global on September 12, 2024 and sell it today you would earn a total of 265.00 from holding Mainstay Epoch Global or generate 13.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
T Rowe Price vs. Mainstay Epoch Global
Performance |
| Timeline |
| T Rowe Price |
| Mainstay Epoch Global |
T Rowe and Mainstay Epoch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with T Rowe and Mainstay Epoch
The main advantage of trading using opposite T Rowe and Mainstay Epoch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if T Rowe 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.| T Rowe vs. Dodge Global Stock | T Rowe vs. Franklin Mutual Global | T Rowe vs. HUMANA INC | T Rowe vs. Aquagold International |
| Mainstay Epoch vs. Dodge Global Stock | Mainstay Epoch vs. Franklin Mutual Global | Mainstay Epoch vs. T Rowe Price | Mainstay Epoch vs. HUMANA INC |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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