Correlation Between Origin Emerging and Mainstay Fiera

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

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

Diversification Opportunities for Origin Emerging and Mainstay Fiera

0.1

Correlation Coefficient

Origin Emerging  Mainstay Fiera

Average diversification

The 3 months correlation between Origin and Mainstay is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Origin Emerging Markets and Mainstay Fiera Smid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Fiera Smid and Origin Emerging 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 Origin Emerging Markets are associated (or correlated) with Mainstay Fiera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Fiera Smid has no effect on the direction of Origin Emerging i.e., Origin Emerging and Mainstay Fiera go up and down completely randomly.

Pair Corralation between Origin Emerging and Mainstay Fiera

Assuming the 90 days horizon Origin Emerging is expected to generate 1.59 times less return on investment than Mainstay Fiera. But when comparing it to its historical volatility, Origin Emerging Markets is 1.13 times less risky than Mainstay Fiera. It trades about 0.11 of its potential returns per unit of risk. Mainstay Fiera Smid is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  1,594  in Mainstay Fiera Smid on September 12, 2024 and sell it today you would earn a total of  165.00  from holding Mainstay Fiera Smid or generate 10.35% return on investment over 90 days.

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

Origin Emerging Markets  vs.  Mainstay Fiera Smid

Origin Emerging Markets

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Origin Emerging Markets are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Origin Emerging may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Mainstay Fiera Smid

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mainstay Fiera Smid are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak essential indicators, Mainstay Fiera may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Origin Emerging and Mainstay Fiera

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

The idea behind Origin Emerging Markets and Mainstay Fiera Smid 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.