Correlation Between Eaton Vance and Mainstay Epoch

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

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

Diversification Opportunities for Eaton Vance and Mainstay Epoch

0.87

Correlation Coefficient

Eaton Vance  Mainstay Epoch

Very poor diversification

The 3 months correlation between Eaton and Mainstay is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Richard 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 Eaton Vance 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 Eaton Vance Richard 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 Eaton Vance i.e., Eaton Vance and Mainstay Epoch go up and down completely randomly.

Pair Corralation between Eaton Vance and Mainstay Epoch

Assuming the 90 days horizon Eaton Vance is expected to generate 1.14 times less return on investment than Mainstay Epoch. But when comparing it to its historical volatility, Eaton Vance Richard is 1.55 times less risky than Mainstay Epoch. It trades about 0.11 of its potential returns per unit of risk. Mainstay Epoch Global is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  2,391  in Mainstay Epoch Global on September 3, 2024 and sell it today you would earn a total of  66.00  from holding Mainstay Epoch Global or generate 2.76% return on investment over 90 days.

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

Eaton Vance Richard  vs.  Mainstay Epoch Global

Eaton Vance Richard

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Eaton Vance Richard are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Eaton Vance 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

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Mainstay Epoch Global are ranked lower than 6 (%) 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 Eaton Vance and Mainstay Epoch

The main advantage of trading using opposite Eaton Vance and Mainstay Epoch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eaton Vance 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 Eaton Vance Richard 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.

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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.