Correlation Between IQ MacKay and IShares JP
Can any of the company-specific risk be diversified away by investing in both IQ MacKay and IShares JP 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 IShares JP 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 iShares JP Morgan, you can compare the effects of market volatilities on IQ MacKay and IShares JP 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 IShares JP. Check out your portfolio center. Please also check ongoing floating volatility patterns of IQ MacKay and IShares JP.
Diversification Opportunities for IQ MacKay and IShares JP
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between MMIT and IShares is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding IQ MacKay Municipal and iShares JP Morgan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares JP Morgan 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 IShares JP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares JP Morgan has no effect on the direction of IQ MacKay i.e., IQ MacKay and IShares JP go up and down completely randomly.
Pair Corralation between IQ MacKay and IShares JP
Given the investment horizon of 90 days IQ MacKay Municipal is expected to generate 0.72 times more return on investment than IShares JP. However, IQ MacKay Municipal is 1.39 times less risky than IShares JP. It trades about 0.16 of its potential returns per unit of risk. iShares JP Morgan is currently generating about 0.1 per unit of risk. If you would invest 2,414 in IQ MacKay Municipal on August 31, 2024 and sell it today you would earn a total of 29.00 from holding IQ MacKay Municipal or generate 1.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
IQ MacKay Municipal vs. iShares JP Morgan
Performance |
| Timeline |
| IQ MacKay Municipal |
| iShares JP Morgan |
IQ MacKay and IShares JP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IQ MacKay and IShares JP
The main advantage of trading using opposite IQ MacKay and IShares JP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IQ MacKay position performs unexpectedly, IShares JP 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 IShares JP will offset losses from the drop in IShares JP's long position.| IQ MacKay vs. iShares JP Morgan | IQ MacKay vs. iShares iBoxx Investment | IQ MacKay vs. SPDR Nuveen Bloomberg | IQ MacKay vs. iShares MBS ETF |
| IShares JP vs. Invesco Emerging Markets | IShares JP vs. VanEck Emerging Markets | IShares JP vs. iShares JP Morgan | IShares JP vs. SPDR Bloomberg Barclays |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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