Correlation Between IQ MacKay and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both IQ MacKay and Goldman Sachs 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 Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IQ MacKay Municipal and Goldman Sachs ETF, you can compare the effects of market volatilities on IQ MacKay and Goldman Sachs 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 Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of IQ MacKay and Goldman Sachs.
Diversification Opportunities for IQ MacKay and Goldman Sachs
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between MMIN and Goldman is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding IQ MacKay Municipal and Goldman Sachs ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs 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 Municipal are associated (or correlated) with Goldman Sachs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldman Sachs ETF has no effect on the direction of IQ MacKay i.e., IQ MacKay and Goldman Sachs go up and down completely randomly.
Pair Corralation between IQ MacKay and Goldman Sachs
Given the investment horizon of 90 days IQ MacKay Municipal is expected to under-perform the Goldman Sachs. In addition to that, IQ MacKay is 9.14 times more volatile than Goldman Sachs ETF. It trades about -0.22 of its total potential returns per unit of risk. Goldman Sachs ETF is currently generating about -0.07 per unit of volatility. If you would invest 5,003 in Goldman Sachs ETF on January 13, 2025 and sell it today you would lose (6.00) from holding Goldman Sachs ETF or give up 0.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
IQ MacKay Municipal vs. Goldman Sachs ETF
Performance |
| Timeline |
| IQ MacKay Municipal |
| Goldman Sachs ETF |
IQ MacKay and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IQ MacKay and Goldman Sachs
The main advantage of trading using opposite IQ MacKay and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IQ MacKay position performs unexpectedly, Goldman Sachs 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 Goldman Sachs will offset losses from the drop in Goldman Sachs' long position.| 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 |
| Goldman Sachs vs. Xtrackers California Municipal | Goldman Sachs vs. VCRM | Goldman Sachs vs. IQ MacKay Municipal | Goldman Sachs vs. IQ MacKay Municipal |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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