Correlation Between IQ MacKay and Invesco BulletShares
Can any of the company-specific risk be diversified away by investing in both IQ MacKay and Invesco BulletShares 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 Invesco BulletShares 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 Invesco BulletShares 2031, you can compare the effects of market volatilities on IQ MacKay and Invesco BulletShares 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 Invesco BulletShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of IQ MacKay and Invesco BulletShares.
Diversification Opportunities for IQ MacKay and Invesco BulletShares
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between MMIT and Invesco is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding IQ MacKay Municipal and Invesco BulletShares 2031 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco BulletShares 2031 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 Invesco BulletShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco BulletShares 2031 has no effect on the direction of IQ MacKay i.e., IQ MacKay and Invesco BulletShares go up and down completely randomly.
Pair Corralation between IQ MacKay and Invesco BulletShares
Given the investment horizon of 90 days IQ MacKay Municipal is expected to generate 0.75 times more return on investment than Invesco BulletShares. However, IQ MacKay Municipal is 1.34 times less risky than Invesco BulletShares. It trades about 0.09 of its potential returns per unit of risk. Invesco BulletShares 2031 is currently generating about 0.06 per unit of risk. If you would invest 2,417 in IQ MacKay Municipal on September 13, 2024 and sell it today you would earn a total of 24.00 from holding IQ MacKay Municipal or generate 0.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 97.67% |
| Values | Daily Returns |
IQ MacKay Municipal vs. Invesco BulletShares 2031
Performance |
| Timeline |
| IQ MacKay Municipal |
| Invesco BulletShares 2031 |
IQ MacKay and Invesco BulletShares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IQ MacKay and Invesco BulletShares
The main advantage of trading using opposite IQ MacKay and Invesco BulletShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IQ MacKay position performs unexpectedly, Invesco BulletShares 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 Invesco BulletShares will offset losses from the drop in Invesco BulletShares' long position.| IQ MacKay vs. IQ MacKay Municipal | IQ MacKay vs. Hartford Municipal Opportunities | IQ MacKay vs. Columbia Multi Sector Municipal | IQ MacKay vs. American Century Diversified |
| Invesco BulletShares vs. Xtrackers California Municipal | Invesco BulletShares vs. VCRM | Invesco BulletShares vs. IQ MacKay Municipal | Invesco BulletShares 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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