Correlation Between IQ MacKay and IndexIQ Active
Can any of the company-specific risk be diversified away by investing in both IQ MacKay and IndexIQ Active 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 IndexIQ Active 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 IndexIQ Active ETF, you can compare the effects of market volatilities on IQ MacKay and IndexIQ Active 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 IndexIQ Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of IQ MacKay and IndexIQ Active.
Diversification Opportunities for IQ MacKay and IndexIQ Active
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between IQHI and IndexIQ is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding IQ MacKay ESG and IndexIQ Active ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IndexIQ Active ETF 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 IndexIQ Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IndexIQ Active ETF has no effect on the direction of IQ MacKay i.e., IQ MacKay and IndexIQ Active go up and down completely randomly.
Pair Corralation between IQ MacKay and IndexIQ Active
Given the investment horizon of 90 days IQ MacKay ESG is expected to generate 0.6 times more return on investment than IndexIQ Active. However, IQ MacKay ESG is 1.66 times less risky than IndexIQ Active. It trades about 0.19 of its potential returns per unit of risk. IndexIQ Active ETF is currently generating about 0.08 per unit of risk. If you would invest 2,659 in IQ MacKay ESG on August 26, 2024 and sell it today you would earn a total of 19.00 from holding IQ MacKay ESG or generate 0.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
IQ MacKay ESG vs. IndexIQ Active ETF
Performance |
| Timeline |
| IQ MacKay ESG |
| IndexIQ Active ETF |
IQ MacKay and IndexIQ Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IQ MacKay and IndexIQ Active
The main advantage of trading using opposite IQ MacKay and IndexIQ Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IQ MacKay position performs unexpectedly, IndexIQ Active 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 IndexIQ Active will offset losses from the drop in IndexIQ Active's long position.| IQ MacKay vs. IndexIQ Active ETF | IQ MacKay vs. IndexIQ Active ETF | IQ MacKay vs. SSGA Active Trust | IQ MacKay vs. BlackRock Intermediate Muni |
| IndexIQ Active vs. BlackRock High Yield | IndexIQ Active vs. Dimensional ETF Trust | IndexIQ Active vs. JP Morgan Exchange Traded | IndexIQ Active vs. Janus Detroit Street |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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