Correlation Between VanEck Long and IQ MacKay
Can any of the company-specific risk be diversified away by investing in both VanEck Long 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 VanEck Long and IQ MacKay into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VanEck Long Muni and IQ MacKay Municipal, you can compare the effects of market volatilities on VanEck Long 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 VanEck Long with a short position of IQ MacKay. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Long and IQ MacKay.
Diversification Opportunities for VanEck Long and IQ MacKay
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between VanEck and MMIN is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Long Muni 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 VanEck Long 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 VanEck Long Muni 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 VanEck Long i.e., VanEck Long and IQ MacKay go up and down completely randomly.
Pair Corralation between VanEck Long and IQ MacKay
Considering the 90-day investment horizon VanEck Long Muni is expected to generate 0.98 times more return on investment than IQ MacKay. However, VanEck Long Muni is 1.02 times less risky than IQ MacKay. It trades about -0.03 of its potential returns per unit of risk. IQ MacKay Municipal is currently generating about -0.04 per unit of risk. If you would invest 1,777 in VanEck Long Muni on October 26, 2024 and sell it today you would lose (3.00) from holding VanEck Long Muni or give up 0.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
VanEck Long Muni vs. IQ MacKay Municipal
Performance |
| Timeline |
| VanEck Long Muni |
| IQ MacKay Municipal |
VanEck Long and IQ MacKay Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck Long and IQ MacKay
The main advantage of trading using opposite VanEck Long and IQ MacKay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Long 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.| VanEck Long vs. VanEck Intermediate Muni | VanEck Long vs. VanEck Short Muni | VanEck Long vs. Invesco National AMT Free | VanEck Long vs. SPDR Nuveen Bloomberg |
| 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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