Correlation Between Energy Basic and Mainstay Epoch
Can any of the company-specific risk be diversified away by investing in both Energy Basic 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 Energy Basic and Mainstay Epoch into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Energy Basic Materials and Mainstay Epoch International, you can compare the effects of market volatilities on Energy Basic 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 Energy Basic with a short position of Mainstay Epoch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energy Basic and Mainstay Epoch.
Diversification Opportunities for Energy Basic and Mainstay Epoch
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between ENERGY and Mainstay is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Energy Basic Materials and Mainstay Epoch International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Epoch Inter and Energy Basic 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 Energy Basic Materials 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 Inter has no effect on the direction of Energy Basic i.e., Energy Basic and Mainstay Epoch go up and down completely randomly.
Pair Corralation between Energy Basic and Mainstay Epoch
Assuming the 90 days horizon Energy Basic Materials is expected to generate 1.16 times more return on investment than Mainstay Epoch. However, Energy Basic is 1.16 times more volatile than Mainstay Epoch International. It trades about 0.06 of its potential returns per unit of risk. Mainstay Epoch International is currently generating about -0.13 per unit of risk. If you would invest 1,023 in Energy Basic Materials on September 4, 2024 and sell it today you would earn a total of 11.00 from holding Energy Basic Materials or generate 1.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Energy Basic Materials vs. Mainstay Epoch International
Performance |
| Timeline |
| Energy Basic Materials |
| Mainstay Epoch Inter |
Energy Basic and Mainstay Epoch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energy Basic and Mainstay Epoch
The main advantage of trading using opposite Energy Basic and Mainstay Epoch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energy Basic 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.| Energy Basic vs. Mirova Global Green | Energy Basic vs. William Blair Large | Energy Basic vs. Semiconductor Ultrasector Profund | Energy Basic vs. Scharf Global Opportunity |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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