Correlation Between IQ MacKay and Columbia Multi
Can any of the company-specific risk be diversified away by investing in both IQ MacKay and Columbia Multi 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 Columbia Multi 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 Columbia Multi Sector Municipal, you can compare the effects of market volatilities on IQ MacKay and Columbia Multi 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 Columbia Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of IQ MacKay and Columbia Multi.
Diversification Opportunities for IQ MacKay and Columbia Multi
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between MMIN and Columbia is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding IQ MacKay Municipal and Columbia Multi Sector Municipa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Multi Sector 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 Columbia Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Multi Sector has no effect on the direction of IQ MacKay i.e., IQ MacKay and Columbia Multi go up and down completely randomly.
Pair Corralation between IQ MacKay and Columbia Multi
Given the investment horizon of 90 days IQ MacKay is expected to generate 1.14 times less return on investment than Columbia Multi. But when comparing it to its historical volatility, IQ MacKay Municipal is 1.12 times less risky than Columbia Multi. It trades about 0.15 of its potential returns per unit of risk. Columbia Multi Sector Municipal is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 2,032 in Columbia Multi Sector Municipal on August 24, 2024 and sell it today you would earn a total of 31.00 from holding Columbia Multi Sector Municipal or generate 1.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
IQ MacKay Municipal vs. Columbia Multi Sector Municipa
Performance |
| Timeline |
| IQ MacKay Municipal |
| Columbia Multi Sector |
IQ MacKay and Columbia Multi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IQ MacKay and Columbia Multi
The main advantage of trading using opposite IQ MacKay and Columbia Multi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IQ MacKay position performs unexpectedly, Columbia Multi 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 Columbia Multi will offset losses from the drop in Columbia Multi's long position.| IQ MacKay vs. IQ MacKay Municipal | IQ MacKay vs. Columbia Multi Sector Municipal | IQ MacKay vs. Hartford Municipal Opportunities | IQ MacKay vs. iShares Short Maturity |
| Columbia Multi vs. IQ MacKay Municipal | Columbia Multi vs. Hartford Municipal Opportunities | Columbia Multi vs. Franklin Liberty Federal |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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