Correlation Between Empire State and IQ MacKay
Can any of the company-specific risk be diversified away by investing in both Empire State and IQ MacKay 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 Empire State and IQ MacKay into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Empire State Realty and IQ MacKay ESG, you can compare the effects of market volatilities on Empire State and IQ MacKay 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 Empire State with a short position of IQ MacKay. Check out your portfolio center. Please also check ongoing floating volatility patterns of Empire State and IQ MacKay.
Diversification Opportunities for Empire State and IQ MacKay
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Empire and IQHI is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Empire State Realty and IQ MacKay ESG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IQ MacKay ESG and Empire State 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 Empire State Realty are associated (or correlated) with IQ MacKay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IQ MacKay ESG has no effect on the direction of Empire State i.e., Empire State and IQ MacKay go up and down completely randomly.
Pair Corralation between Empire State and IQ MacKay
Given the investment horizon of 90 days Empire State Realty is expected to generate 6.98 times more return on investment than IQ MacKay. However, Empire State is 6.98 times more volatile than IQ MacKay ESG. It trades about 0.05 of its potential returns per unit of risk. IQ MacKay ESG is currently generating about 0.17 per unit of risk. If you would invest 956.00 in Empire State Realty on September 1, 2024 and sell it today you would earn a total of 140.00 from holding Empire State Realty or generate 14.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Empire State Realty vs. IQ MacKay ESG
Performance |
| Timeline |
| Empire State Realty |
| IQ MacKay ESG |
Empire State and IQ MacKay Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Empire State and IQ MacKay
The main advantage of trading using opposite Empire State and IQ MacKay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Empire State position performs unexpectedly, IQ MacKay 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 IQ MacKay will offset losses from the drop in IQ MacKay's long position.| Empire State vs. Paramount Group | Empire State vs. Hudson Pacific Properties | Empire State vs. Equity Commonwealth | Empire State vs. Douglas Emmett |
| IQ MacKay vs. IndexIQ Active ETF | IQ MacKay vs. IndexIQ Active ETF | IQ MacKay vs. SSGA Active Trust | IQ MacKay vs. BlackRock Intermediate Muni |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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