Correlation Between Scharf Global and Mainstay Epoch
Can any of the company-specific risk be diversified away by investing in both Scharf Global 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 Scharf Global and Mainstay Epoch into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scharf Global Opportunity and Mainstay Epoch Small, you can compare the effects of market volatilities on Scharf Global 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 Scharf Global with a short position of Mainstay Epoch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scharf Global and Mainstay Epoch.
Diversification Opportunities for Scharf Global and Mainstay Epoch
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Scharf and Mainstay is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Scharf Global Opportunity and Mainstay Epoch Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Epoch Small and Scharf Global 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 Scharf Global Opportunity 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 Small has no effect on the direction of Scharf Global i.e., Scharf Global and Mainstay Epoch go up and down completely randomly.
Pair Corralation between Scharf Global and Mainstay Epoch
Assuming the 90 days horizon Scharf Global is expected to generate 3.68 times less return on investment than Mainstay Epoch. But when comparing it to its historical volatility, Scharf Global Opportunity is 2.51 times less risky than Mainstay Epoch. It trades about 0.22 of its potential returns per unit of risk. Mainstay Epoch Small is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 1,865 in Mainstay Epoch Small on August 27, 2024 and sell it today you would earn a total of 226.00 from holding Mainstay Epoch Small or generate 12.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scharf Global Opportunity vs. Mainstay Epoch Small
Performance |
| Timeline |
| Scharf Global Opportunity |
| Mainstay Epoch Small |
Scharf Global and Mainstay Epoch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scharf Global and Mainstay Epoch
The main advantage of trading using opposite Scharf Global and Mainstay Epoch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scharf Global 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.| Scharf Global vs. Materials Portfolio Fidelity | Scharf Global vs. Rational Special Situations | Scharf Global vs. Multimedia Portfolio Multimedia | Scharf Global vs. Morgan Stanley Institutional |
| Mainstay Epoch vs. Morgan Stanley Global | Mainstay Epoch vs. Scharf Global Opportunity | Mainstay Epoch vs. Barings Global Floating | Mainstay Epoch vs. Mirova Global Green |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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