Correlation Between Mainstay Epoch and Marsico Focus

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

Diversification Opportunities for Mainstay Epoch and Marsico Focus

0.07

Correlation Coefficient

Mainstay Epoch  Marsico Focus

Significant diversification

The 3 months correlation between Mainstay and Marsico is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Epoch International and Marsico Focus Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marsico Focus 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 Marsico Focus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marsico Focus has no effect on the direction of Mainstay Epoch i.e., Mainstay Epoch and Marsico Focus go up and down completely randomly.

Pair Corralation between Mainstay Epoch and Marsico Focus

Assuming the 90 days horizon Mainstay Epoch International is expected to generate 0.49 times more return on investment than Marsico Focus. However, Mainstay Epoch International is 2.03 times less risky than Marsico Focus. It trades about 0.41 of its potential returns per unit of risk. Marsico Focus Fund is currently generating about -0.25 per unit of risk. If you would invest  3,867  in Mainstay Epoch International on December 5, 2024 and sell it today you would earn a total of  212.00  from holding Mainstay Epoch International or generate 5.48% return on investment over 90 days.

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

Mainstay Epoch International  vs.  Marsico Focus Fund

Mainstay Epoch Inter

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mainstay Epoch International 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.

Marsico Focus

Risk-Adjusted Performance

Very Weak

Over the last 90 days Marsico Focus Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's fundamental indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Mainstay Epoch and Marsico Focus

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

The idea behind Mainstay Epoch International and Marsico Focus Fund 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.