Correlation Between IShares Core and IQ MacKay
Can any of the company-specific risk be diversified away by investing in both IShares Core 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 IShares Core and IQ MacKay into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Core SP and IQ MacKay ESG, you can compare the effects of market volatilities on IShares Core 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 IShares Core with a short position of IQ MacKay. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and IQ MacKay.
Diversification Opportunities for IShares Core and IQ MacKay
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and IQHI is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core SP 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 IShares Core 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 iShares Core SP 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 IShares Core i.e., IShares Core and IQ MacKay go up and down completely randomly.
Pair Corralation between IShares Core and IQ MacKay
Considering the 90-day investment horizon iShares Core SP is expected to generate 3.93 times more return on investment than IQ MacKay. However, IShares Core is 3.93 times more volatile than IQ MacKay ESG. It trades about 0.16 of its potential returns per unit of risk. IQ MacKay ESG is currently generating about 0.24 per unit of risk. If you would invest 58,365 in iShares Core SP on August 29, 2024 and sell it today you would earn a total of 1,817 from holding iShares Core SP or generate 3.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Core SP vs. IQ MacKay ESG
Performance |
| Timeline |
| iShares Core SP |
| IQ MacKay ESG |
IShares Core and IQ MacKay Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Core and IQ MacKay
The main advantage of trading using opposite IShares Core and IQ MacKay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core 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.| IShares Core vs. iShares Core SP | IShares Core vs. iShares Core SP | IShares Core vs. iShares SP 500 | IShares Core vs. iShares Russell 2000 |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |