Correlation Between Mairs Power and IQ MacKay
Can any of the company-specific risk be diversified away by investing in both Mairs Power 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 Mairs Power and IQ MacKay into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mairs Power Minnesota and IQ MacKay Municipal, you can compare the effects of market volatilities on Mairs Power 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 Mairs Power with a short position of IQ MacKay. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mairs Power and IQ MacKay.
Diversification Opportunities for Mairs Power and IQ MacKay
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Mairs and MMIN is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Mairs Power Minnesota 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 Mairs Power 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 Mairs Power Minnesota 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 Mairs Power i.e., Mairs Power and IQ MacKay go up and down completely randomly.
Pair Corralation between Mairs Power and IQ MacKay
Given the investment horizon of 90 days Mairs Power Minnesota is expected to under-perform the IQ MacKay. But the etf apears to be less risky and, when comparing its historical volatility, Mairs Power Minnesota is 1.3 times less risky than IQ MacKay. The etf trades about -0.01 of its potential returns per unit of risk. The IQ MacKay Municipal is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2,410 in IQ MacKay Municipal on August 25, 2024 and sell it today you would earn a total of 9.00 from holding IQ MacKay Municipal or generate 0.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mairs Power Minnesota vs. IQ MacKay Municipal
Performance |
| Timeline |
| Mairs Power Minnesota |
| IQ MacKay Municipal |
Mairs Power and IQ MacKay Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mairs Power and IQ MacKay
The main advantage of trading using opposite Mairs Power and IQ MacKay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mairs Power 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.| Mairs Power vs. BlackRock Intermediate Muni | Mairs Power vs. IQ MacKay Municipal | Mairs Power vs. Overlay Shares Municipal | Mairs Power vs. IQ MacKay 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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