Correlation Between IQ MacKay and VanEck China
Can any of the company-specific risk be diversified away by investing in both IQ MacKay and VanEck China 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 VanEck China 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 VanEck China Bond, you can compare the effects of market volatilities on IQ MacKay and VanEck China 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 VanEck China. Check out your portfolio center. Please also check ongoing floating volatility patterns of IQ MacKay and VanEck China.
Diversification Opportunities for IQ MacKay and VanEck China
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between MMIT and VanEck is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding IQ MacKay Municipal and VanEck China Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck China Bond 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 VanEck China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck China Bond has no effect on the direction of IQ MacKay i.e., IQ MacKay and VanEck China go up and down completely randomly.
Pair Corralation between IQ MacKay and VanEck China
Given the investment horizon of 90 days IQ MacKay Municipal is expected to generate 0.76 times more return on investment than VanEck China. However, IQ MacKay Municipal is 1.32 times less risky than VanEck China. It trades about 0.07 of its potential returns per unit of risk. VanEck China Bond is currently generating about 0.04 per unit of risk. If you would invest 2,273 in IQ MacKay Municipal on September 3, 2024 and sell it today you would earn a total of 166.00 from holding IQ MacKay Municipal or generate 7.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
IQ MacKay Municipal vs. VanEck China Bond
Performance |
| Timeline |
| IQ MacKay Municipal |
| VanEck China Bond |
IQ MacKay and VanEck China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IQ MacKay and VanEck China
The main advantage of trading using opposite IQ MacKay and VanEck China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IQ MacKay position performs unexpectedly, VanEck China 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 VanEck China will offset losses from the drop in VanEck China's long position.| IQ MacKay vs. IQ MacKay Municipal | IQ MacKay vs. Hartford Municipal Opportunities | IQ MacKay vs. Columbia Multi Sector Municipal | IQ MacKay vs. Franklin Liberty Federal |
| VanEck China vs. SPDR Bloomberg Emerging | VanEck China vs. Vanguard Emerging Markets | VanEck China vs. SPDR Bloomberg Barclays | VanEck China vs. VanEck JP Morgan |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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