Correlation Between Alliancebernstein and Mainstay Epoch

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

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

Diversification Opportunities for Alliancebernstein and Mainstay Epoch

0.4

Correlation Coefficient

Alliancebernstein  Mainstay Epoch

Very weak diversification

The 3 months correlation between Alliancebernstein and Mainstay is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Alliancebernstein National Mun and Mainstay Epoch Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Epoch Equity and Alliancebernstein 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 Alliancebernstein National Municipalome 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 Equity has no effect on the direction of Alliancebernstein i.e., Alliancebernstein and Mainstay Epoch go up and down completely randomly.

Pair Corralation between Alliancebernstein and Mainstay Epoch

Assuming the 90 days horizon Alliancebernstein National Municipalome is expected to under-perform the Mainstay Epoch. But the mutual fund apears to be less risky and, when comparing its historical volatility, Alliancebernstein National Municipalome is 1.63 times less risky than Mainstay Epoch. The mutual fund trades about 0.0 of its potential returns per unit of risk. The Mainstay Epoch Equity is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,838  in Mainstay Epoch Equity on October 11, 2024 and sell it today you would earn a total of  303.00  from holding Mainstay Epoch Equity or generate 16.49% return on investment over 90 days.

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

Alliancebernstein National Mun  vs.  Mainstay Epoch Equity

Alliancebernstein

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alliancebernstein National Municipalome has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental drivers, Alliancebernstein is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Mainstay Epoch Equity

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mainstay Epoch Equity has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's fundamental 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 Alliancebernstein and Mainstay Epoch

The main advantage of trading using opposite Alliancebernstein and Mainstay Epoch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alliancebernstein 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.

The idea behind Alliancebernstein National Municipalome and Mainstay Epoch Equity 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.

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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.