Correlation Between Mid Cap and Mainstay Epoch
Can any of the company-specific risk be diversified away by investing in both Mid Cap and Mainstay Epoch 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 Mid Cap and Mainstay Epoch into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mid Cap Growth and Mainstay Epoch Small, you can compare the effects of market volatilities on Mid Cap and Mainstay Epoch 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 Mid Cap with a short position of Mainstay Epoch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mid Cap and Mainstay Epoch.
Diversification Opportunities for Mid Cap and Mainstay Epoch
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Mid and Mainstay is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Mid Cap Growth and Mainstay Epoch Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Epoch Small and Mid Cap 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 Mid Cap Growth are associated (or correlated) with Mainstay Epoch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Epoch Small has no effect on the direction of Mid Cap i.e., Mid Cap and Mainstay Epoch go up and down completely randomly.
Pair Corralation between Mid Cap and Mainstay Epoch
Assuming the 90 days horizon Mid Cap Growth is expected to under-perform the Mainstay Epoch. In addition to that, Mid Cap is 1.14 times more volatile than Mainstay Epoch Small. It trades about -0.23 of its total potential returns per unit of risk. Mainstay Epoch Small is currently generating about -0.24 per unit of volatility. If you would invest 2,071 in Mainstay Epoch Small on October 9, 2024 and sell it today you would lose (116.00) from holding Mainstay Epoch Small or give up 5.6% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Mid Cap Growth vs. Mainstay Epoch Small
Performance |
Timeline |
Mid Cap Growth |
Mainstay Epoch Small |
Mid Cap and Mainstay Epoch Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Mid Cap and Mainstay Epoch
The main advantage of trading using opposite Mid Cap and Mainstay Epoch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mid Cap position performs unexpectedly, Mainstay Epoch 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 Epoch will offset losses from the drop in Mainstay Epoch's long position.Mid Cap vs. Touchstone Sustainability And | Mid Cap vs. Growth Opportunities Fund | Mid Cap vs. Total Return Fund | Mid Cap vs. William Blair International |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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