Correlation Between Mainstay Pinestone and Mainstay Epoch

Can any of the company-specific risk be diversified away by investing in both Mainstay Pinestone 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 Pinestone 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 Pinestone Global and Mainstay Epoch Global, you can compare the effects of market volatilities on Mainstay Pinestone 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 Pinestone with a short position of Mainstay Epoch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Pinestone and Mainstay Epoch.

Diversification Opportunities for Mainstay Pinestone and Mainstay Epoch

0.9

Correlation Coefficient

Mainstay Pinestone  Mainstay Epoch

Almost no diversification

The 3 months correlation between Mainstay and Mainstay is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Pinestone Global and Mainstay Epoch Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Epoch Global and Mainstay Pinestone 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 Pinestone Global 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 Global has no effect on the direction of Mainstay Pinestone i.e., Mainstay Pinestone and Mainstay Epoch go up and down completely randomly.

Pair Corralation between Mainstay Pinestone and Mainstay Epoch

Assuming the 90 days horizon Mainstay Pinestone is expected to generate 1.4 times less return on investment than Mainstay Epoch. In addition to that, Mainstay Pinestone is 1.2 times more volatile than Mainstay Epoch Global. It trades about 0.04 of its total potential returns per unit of risk. Mainstay Epoch Global is currently generating about 0.07 per unit of volatility. If you would invest  2,391  in Mainstay Epoch Global on August 31, 2024 and sell it today you would earn a total of  55.00  from holding Mainstay Epoch Global or generate 2.3% return on investment over 90 days.

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

Mainstay Pinestone Global  vs.  Mainstay Epoch Global

Mainstay Pinestone Global

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Mainstay Pinestone Global are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Mainstay Pinestone is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Mainstay Epoch Global

Risk-Adjusted Performance

5 of 100

Modest

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.

Pair Trading with Mainstay Pinestone and Mainstay Epoch

The main advantage of trading using opposite Mainstay Pinestone and Mainstay Epoch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Pinestone 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 Pinestone Global and Mainstay Epoch Global 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.