Correlation Between Mainstay Epoch and Mainstay Large

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

By analyzing existing cross correlation between Mainstay Epoch Small and Mainstay Large Cap, you can compare the effects of market volatilities on Mainstay Epoch and Mainstay Large 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 Mainstay Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Epoch and Mainstay Large.

Diversification Opportunities for Mainstay Epoch and Mainstay Large

0.97

Correlation Coefficient

Mainstay Epoch  Mainstay Large

Almost no diversification

The 3 months correlation between Mainstay and Mainstay is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Epoch Small and Mainstay Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Large Cap 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 Small are associated (or correlated) with Mainstay Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Large Cap has no effect on the direction of Mainstay Epoch i.e., Mainstay Epoch and Mainstay Large go up and down completely randomly.

Pair Corralation between Mainstay Epoch and Mainstay Large

Assuming the 90 days horizon Mainstay Epoch Small is expected to under-perform the Mainstay Large. But the mutual fund apears to be less risky and, when comparing its historical volatility, Mainstay Epoch Small is 1.25 times less risky than Mainstay Large. The mutual fund trades about -0.13 of its potential returns per unit of risk. The Mainstay Large Cap is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest  1,219  in Mainstay Large Cap on December 30, 2024 and sell it today you would lose (109.00) from holding Mainstay Large Cap or give up 8.94% of portfolio value over 90 days.

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

Mainstay Epoch Small  vs.  Mainstay Large Cap

Mainstay Epoch Small

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mainstay Epoch Small 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.

Mainstay Large Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mainstay Large Cap 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.

Pair Trading with Mainstay Epoch and Mainstay Large

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

The idea behind Mainstay Epoch Small and Mainstay Large Cap 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.