Correlation Between Mainstay Epoch and Aberdeen Select

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

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

Diversification Opportunities for Mainstay Epoch and Aberdeen Select

-0.14

Correlation Coefficient

Mainstay Epoch  Aberdeen Select

Good diversification

The 3 months correlation between Mainstay and Aberdeen is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Epoch International and Aberdeen Select International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Select Inte and Mainstay Epoch 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 Epoch International are associated (or correlated) with Aberdeen Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Select Inte has no effect on the direction of Mainstay Epoch i.e., Mainstay Epoch and Aberdeen Select go up and down completely randomly.

Pair Corralation between Mainstay Epoch and Aberdeen Select

Assuming the 90 days horizon Mainstay Epoch International is expected to generate 0.88 times more return on investment than Aberdeen Select. However, Mainstay Epoch International is 1.14 times less risky than Aberdeen Select. It trades about 0.23 of its potential returns per unit of risk. Aberdeen Select International is currently generating about 0.02 per unit of risk. If you would invest  3,754  in Mainstay Epoch International on December 21, 2024 and sell it today you would earn a total of  399.00  from holding Mainstay Epoch International or generate 10.63% return on investment over 90 days.

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

Mainstay Epoch International  vs.  Aberdeen Select International

Mainstay Epoch Inter

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Mainstay Epoch International are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Mainstay Epoch may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Aberdeen Select Inte

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Aberdeen Select International are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Aberdeen Select 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 Epoch and Aberdeen Select

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

The idea behind Mainstay Epoch International and Aberdeen Select International 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.