Correlation Between Mainstay Epoch and Mainstay Convertible

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

By analyzing existing cross correlation between Mainstay Epoch Global and Mainstay Vertible Fund, you can compare the effects of market volatilities on Mainstay Epoch and Mainstay Convertible 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 Mainstay Convertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Epoch and Mainstay Convertible.

Diversification Opportunities for Mainstay Epoch and Mainstay Convertible

0.65

Correlation Coefficient

Mainstay Epoch  Mainstay Convertible

Poor diversification

The 3 months correlation between Mainstay and Mainstay is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Epoch Global and Mainstay Vertible Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Convertible 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 Global are associated (or correlated) with Mainstay Convertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Convertible has no effect on the direction of Mainstay Epoch i.e., Mainstay Epoch and Mainstay Convertible go up and down completely randomly.

Pair Corralation between Mainstay Epoch and Mainstay Convertible

Assuming the 90 days horizon Mainstay Epoch is expected to generate 2.3 times less return on investment than Mainstay Convertible. In addition to that, Mainstay Epoch is 1.3 times more volatile than Mainstay Vertible Fund. It trades about 0.07 of its total potential returns per unit of risk. Mainstay Vertible Fund is currently generating about 0.21 per unit of volatility. If you would invest  1,902  in Mainstay Vertible Fund on August 31, 2024 and sell it today you would earn a total of  105.00  from holding Mainstay Vertible Fund or generate 5.52% return on investment over 90 days.

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

Mainstay Epoch Global  vs.  Mainstay Vertible Fund

Mainstay Epoch Global

Risk-Adjusted Performance

5 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Mainstay Epoch Global are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Mainstay Epoch is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Mainstay Convertible

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Mainstay Vertible Fund are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Mainstay Convertible 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 Epoch and Mainstay Convertible

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

The idea behind Mainstay Epoch Global and Mainstay Vertible Fund 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.