Correlation Between IQ MacKay and IShares Edge
Can any of the company-specific risk be diversified away by investing in both IQ MacKay and IShares Edge 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 IQ MacKay and IShares Edge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IQ MacKay ESG and iShares Edge Investment, you can compare the effects of market volatilities on IQ MacKay and IShares Edge 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 IQ MacKay with a short position of IShares Edge. Check out your portfolio center. Please also check ongoing floating volatility patterns of IQ MacKay and IShares Edge.
Diversification Opportunities for IQ MacKay and IShares Edge
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between IQHI and IShares is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding IQ MacKay ESG and iShares Edge Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Edge Investment and IQ MacKay 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 IQ MacKay ESG are associated (or correlated) with IShares Edge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Edge Investment has no effect on the direction of IQ MacKay i.e., IQ MacKay and IShares Edge go up and down completely randomly.
Pair Corralation between IQ MacKay and IShares Edge
Given the investment horizon of 90 days IQ MacKay ESG is expected to generate 0.52 times more return on investment than IShares Edge. However, IQ MacKay ESG is 1.93 times less risky than IShares Edge. It trades about 0.24 of its potential returns per unit of risk. iShares Edge Investment is currently generating about 0.08 per unit of risk. If you would invest 2,660 in IQ MacKay ESG on August 29, 2024 and sell it today you would earn a total of 31.00 from holding IQ MacKay ESG or generate 1.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
IQ MacKay ESG vs. iShares Edge Investment
Performance |
| Timeline |
| IQ MacKay ESG |
| iShares Edge Investment |
IQ MacKay and IShares Edge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IQ MacKay and IShares Edge
The main advantage of trading using opposite IQ MacKay and IShares Edge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IQ MacKay position performs unexpectedly, IShares Edge 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 IShares Edge will offset losses from the drop in IShares Edge's long position.The idea behind IQ MacKay ESG and iShares Edge Investment 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.| IShares Edge vs. iShares Edge High | IShares Edge vs. iShares ESG USD | IShares Edge vs. iShares ESG 1 5 | IShares Edge vs. iShares Interest Rate |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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