Correlation Between Mainstay Epoch and Aston Montag

Can any of the company-specific risk be diversified away by investing in both Mainstay Epoch and Aston Montag 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 Aston Montag 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 Aston Montag Caldwell, you can compare the effects of market volatilities on Mainstay Epoch and Aston Montag 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 Aston Montag. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Epoch and Aston Montag.

Diversification Opportunities for Mainstay Epoch and Aston Montag

-0.68

Correlation Coefficient

Mainstay Epoch  Aston Montag

Excellent diversification

The 3 months correlation between Mainstay and Aston is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Epoch International and Aston Montag Caldwell in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aston Montag Caldwell 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 Aston Montag. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aston Montag Caldwell has no effect on the direction of Mainstay Epoch i.e., Mainstay Epoch and Aston Montag go up and down completely randomly.

Pair Corralation between Mainstay Epoch and Aston Montag

Assuming the 90 days horizon Mainstay Epoch International is expected to under-perform the Aston Montag. But the mutual fund apears to be less risky and, when comparing its historical volatility, Mainstay Epoch International is 1.1 times less risky than Aston Montag. The mutual fund trades about -0.18 of its potential returns per unit of risk. The Aston Montag Caldwell is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  1,323  in Aston Montag Caldwell on September 17, 2024 and sell it today you would earn a total of  75.00  from holding Aston Montag Caldwell or generate 5.67% return on investment over 90 days.

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

Mainstay Epoch International  vs.  Aston Montag Caldwell

Mainstay Epoch Inter

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mainstay Epoch International has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Aston Montag Caldwell

Risk-Adjusted Performance

8 of 100

OK

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

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

The idea behind Mainstay Epoch International and Aston Montag Caldwell 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..