Correlation Between Eic Value and Mainstay
Can any of the company-specific risk be diversified away by investing in both Eic Value and Mainstay 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 Eic Value and Mainstay into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eic Value Fund and Mainstay Sp 500, you can compare the effects of market volatilities on Eic Value and Mainstay 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 Eic Value with a short position of Mainstay. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eic Value and Mainstay.
Diversification Opportunities for Eic Value and Mainstay
Very poor diversification
The 3 months correlation between Eic and Mainstay is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Eic Value Fund and Mainstay Sp 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Sp 500 and Eic Value 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 Eic Value Fund are associated (or correlated) with Mainstay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Sp 500 has no effect on the direction of Eic Value i.e., Eic Value and Mainstay go up and down completely randomly.
Pair Corralation between Eic Value and Mainstay
Assuming the 90 days horizon Eic Value is expected to generate 5.55 times less return on investment than Mainstay. But when comparing it to its historical volatility, Eic Value Fund is 1.21 times less risky than Mainstay. It trades about 0.04 of its potential returns per unit of risk. Mainstay Sp 500 is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 5,978 in Mainstay Sp 500 on September 14, 2024 and sell it today you would earn a total of 489.00 from holding Mainstay Sp 500 or generate 8.18% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Eic Value Fund vs. Mainstay Sp 500
Performance |
Timeline |
Eic Value Fund |
Mainstay Sp 500 |
Eic Value and Mainstay Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Eic Value and Mainstay
The main advantage of trading using opposite Eic Value and Mainstay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eic Value position performs unexpectedly, Mainstay 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 will offset losses from the drop in Mainstay's long position.Eic Value vs. Eic Value Fund | Eic Value vs. T Rowe Price | Eic Value vs. Davidson Multi Cap Equity | Eic Value vs. Equity Income Fund |
Mainstay vs. Auer Growth Fund | Mainstay vs. Century Small Cap | Mainstay vs. Eic Value Fund | Mainstay vs. Nasdaq 100 Index Fund |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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