Correlation Between Mainstay Conservative and Mainstay Epoch

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

Diversification Opportunities for Mainstay Conservative and Mainstay Epoch

0.89

Correlation Coefficient

Mainstay Conservative  Mainstay Epoch

Very poor diversification

The 3 months correlation between Mainstay and Mainstay is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Conservative Etf 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 Conservative 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 Conservative Etf 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 Conservative i.e., Mainstay Conservative and Mainstay Epoch go up and down completely randomly.

Pair Corralation between Mainstay Conservative and Mainstay Epoch

Assuming the 90 days horizon Mainstay Conservative is expected to generate 1.69 times less return on investment than Mainstay Epoch. But when comparing it to its historical volatility, Mainstay Conservative Etf is 1.65 times less risky than Mainstay Epoch. It trades about 0.16 of its potential returns per unit of risk. Mainstay Epoch Equity is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  2,304  in Mainstay Epoch Equity on August 31, 2024 and sell it today you would earn a total of  145.00  from holding Mainstay Epoch Equity or generate 6.29% return on investment over 90 days.

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

Mainstay Conservative Etf  vs.  Mainstay Epoch Equity

Mainstay Conservative Etf

Risk-Adjusted Performance

12 of 100

Good

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

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 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 Conservative and Mainstay Epoch

The main advantage of trading using opposite Mainstay Conservative and Mainstay Epoch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Conservative 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 Conservative Etf 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.