Correlation Between Mainstay Epoch and Fisher Small

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

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

Diversification Opportunities for Mainstay Epoch and Fisher Small

0.33

Correlation Coefficient

Mainstay Epoch  Fisher Small

Weak diversification

The 3 months correlation between Mainstay and Fisher is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Epoch Equity and Fisher Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fisher Small Cap and Mainstay Epoch 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 Epoch Equity are associated (or correlated) with Fisher Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fisher Small Cap has no effect on the direction of Mainstay Epoch i.e., Mainstay Epoch and Fisher Small go up and down completely randomly.

Pair Corralation between Mainstay Epoch and Fisher Small

Assuming the 90 days horizon Mainstay Epoch Equity is expected to under-perform the Fisher Small. But the mutual fund apears to be less risky and, when comparing its historical volatility, Mainstay Epoch Equity is 1.08 times less risky than Fisher Small. The mutual fund trades about -0.06 of its potential returns per unit of risk. The Fisher Small Cap is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  1,176  in Fisher Small Cap on September 12, 2024 and sell it today you would earn a total of  151.00  from holding Fisher Small Cap or generate 12.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Mainstay Epoch Equity  vs.  Fisher Small Cap

Mainstay Epoch Equity

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mainstay Epoch Equity has generated negative risk-adjusted returns adding no value to fund investors. 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.

Fisher Small Cap

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fisher Small Cap are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Fisher Small may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Mainstay Epoch and Fisher Small

The main advantage of trading using opposite Mainstay Epoch and Fisher Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Epoch position performs unexpectedly, Fisher Small 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 Fisher Small will offset losses from the drop in Fisher Small's long position.

The idea behind Mainstay Epoch Equity and Fisher Small Cap 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.

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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.