Correlation Between Vanguard Total and Mainstay Epoch
Can any of the company-specific risk be diversified away by investing in both Vanguard Total 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 Vanguard Total and Mainstay Epoch into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Total International and Mainstay Epoch International, you can compare the effects of market volatilities on Vanguard Total 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 Vanguard Total with a short position of Mainstay Epoch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Total and Mainstay Epoch.
Diversification Opportunities for Vanguard Total and Mainstay Epoch
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vanguard and Mainstay is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Total International 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 Vanguard Total 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 Vanguard Total International 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 Vanguard Total i.e., Vanguard Total and Mainstay Epoch go up and down completely randomly.
Pair Corralation between Vanguard Total and Mainstay Epoch
Assuming the 90 days horizon Vanguard Total International is expected to generate 1.03 times more return on investment than Mainstay Epoch. However, Vanguard Total is 1.03 times more volatile than Mainstay Epoch International. It trades about 0.07 of its potential returns per unit of risk. Mainstay Epoch International is currently generating about 0.02 per unit of risk. If you would invest 11,702 in Vanguard Total International on September 3, 2024 and sell it today you would earn a total of 1,528 from holding Vanguard Total International or generate 13.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Total International vs. Mainstay Epoch International
Performance |
| Timeline |
| Vanguard Total Inter |
| Mainstay Epoch Inter |
Vanguard Total and Mainstay Epoch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Total and Mainstay Epoch
The main advantage of trading using opposite Vanguard Total and Mainstay Epoch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Total 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.| Vanguard Total vs. Vanguard Total Bond | Vanguard Total vs. Vanguard Extended Market | Vanguard Total vs. Vanguard Small Cap Index | Vanguard Total vs. Vanguard Mid Cap Index |
| Mainstay Epoch vs. Vanguard Total International | Mainstay Epoch vs. Vanguard Total International | Mainstay Epoch vs. Vanguard Total International | Mainstay Epoch vs. Vanguard Total International |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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