Correlation Between Franklin Liberty and IQ MacKay
Can any of the company-specific risk be diversified away by investing in both Franklin Liberty 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 Franklin Liberty and IQ MacKay into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Liberty Intermediate and IQ MacKay Municipal, you can compare the effects of market volatilities on Franklin Liberty 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 Franklin Liberty with a short position of IQ MacKay. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Liberty and IQ MacKay.
Diversification Opportunities for Franklin Liberty and IQ MacKay
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Franklin and MMIN is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Liberty Intermediate and IQ MacKay Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IQ MacKay Municipal and Franklin Liberty 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 Franklin Liberty Intermediate 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 Municipal has no effect on the direction of Franklin Liberty i.e., Franklin Liberty and IQ MacKay go up and down completely randomly.
Pair Corralation between Franklin Liberty and IQ MacKay
Given the investment horizon of 90 days Franklin Liberty is expected to generate 1.75 times less return on investment than IQ MacKay. But when comparing it to its historical volatility, Franklin Liberty Intermediate is 1.08 times less risky than IQ MacKay. It trades about 0.1 of its potential returns per unit of risk. IQ MacKay Municipal is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 2,403 in IQ MacKay Municipal on August 29, 2024 and sell it today you would earn a total of 38.00 from holding IQ MacKay Municipal or generate 1.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Liberty Intermediate vs. IQ MacKay Municipal
Performance |
| Timeline |
| Franklin Liberty Int |
| IQ MacKay Municipal |
Franklin Liberty and IQ MacKay Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Liberty and IQ MacKay
The main advantage of trading using opposite Franklin Liberty and IQ MacKay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Liberty 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.| Franklin Liberty vs. Franklin Liberty Federal | Franklin Liberty vs. Hartford Municipal Opportunities | Franklin Liberty vs. IQ MacKay Municipal | Franklin Liberty vs. First Trust Municipal |
| IQ MacKay vs. IQ MacKay Municipal | IQ MacKay vs. Franklin Liberty Federal | IQ MacKay vs. Columbia Multi Sector Municipal | IQ MacKay vs. Hartford Municipal Opportunities |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |