Correlation Between Mainstay Fiera and Mainstay Epoch

Can any of the company-specific risk be diversified away by investing in both Mainstay Fiera 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 Mainstay Fiera and Mainstay Epoch into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Mainstay Fiera Smid and Mainstay Epoch Equity, you can compare the effects of market volatilities on Mainstay Fiera 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 Mainstay Fiera with a short position of Mainstay Epoch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Fiera and Mainstay Epoch.

Diversification Opportunities for Mainstay Fiera and Mainstay Epoch

0.88

Correlation Coefficient

Mainstay Fiera  Mainstay Epoch

Very poor diversification

The 3 months correlation between Mainstay and Mainstay is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Fiera Smid and Mainstay Epoch Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Epoch Equity and Mainstay Fiera 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 Mainstay Fiera Smid 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 Equity has no effect on the direction of Mainstay Fiera i.e., Mainstay Fiera and Mainstay Epoch go up and down completely randomly.

Pair Corralation between Mainstay Fiera and Mainstay Epoch

Assuming the 90 days horizon Mainstay Fiera Smid is expected to generate 1.61 times more return on investment than Mainstay Epoch. However, Mainstay Fiera is 1.61 times more volatile than Mainstay Epoch Equity. It trades about 0.22 of its potential returns per unit of risk. Mainstay Epoch Equity is currently generating about 0.16 per unit of risk. If you would invest  1,597  in Mainstay Fiera Smid on September 3, 2024 and sell it today you would earn a total of  223.00  from holding Mainstay Fiera Smid or generate 13.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Mainstay Fiera Smid  vs.  Mainstay Epoch Equity

Mainstay Fiera Smid

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Mainstay Fiera Smid are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak essential indicators, Mainstay Fiera showed solid returns over the last few months and may actually be approaching a breakup point.

Mainstay Epoch Equity

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mainstay Epoch Equity are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental drivers, Mainstay Epoch is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Mainstay Fiera and Mainstay Epoch

The main advantage of trading using opposite Mainstay Fiera and Mainstay Epoch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Fiera 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.

The idea behind Mainstay Fiera Smid and Mainstay Epoch Equity pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.