Correlation Between IQ MacKay and VanEck CEF
Can any of the company-specific risk be diversified away by investing in both IQ MacKay and VanEck CEF 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 CEF 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 CEF Municipal, you can compare the effects of market volatilities on IQ MacKay and VanEck CEF 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 CEF. Check out your portfolio center. Please also check ongoing floating volatility patterns of IQ MacKay and VanEck CEF.
Diversification Opportunities for IQ MacKay and VanEck CEF
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between MMIT and VanEck is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding IQ MacKay Municipal and VanEck CEF Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck CEF Municipal 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 CEF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck CEF Municipal has no effect on the direction of IQ MacKay i.e., IQ MacKay and VanEck CEF go up and down completely randomly.
Pair Corralation between IQ MacKay and VanEck CEF
Given the investment horizon of 90 days IQ MacKay is expected to generate 3.88 times less return on investment than VanEck CEF. But when comparing it to its historical volatility, IQ MacKay Municipal is 1.71 times less risky than VanEck CEF. It trades about 0.14 of its potential returns per unit of risk. VanEck CEF Municipal is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 2,211 in VanEck CEF Municipal on September 3, 2024 and sell it today you would earn a total of 79.00 from holding VanEck CEF Municipal or generate 3.57% 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. VanEck CEF Municipal
Performance |
| Timeline |
| IQ MacKay Municipal |
| VanEck CEF Municipal |
IQ MacKay and VanEck CEF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IQ MacKay and VanEck CEF
The main advantage of trading using opposite IQ MacKay and VanEck CEF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IQ MacKay position performs unexpectedly, VanEck CEF 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 CEF will offset losses from the drop in VanEck CEF'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 CEF vs. Franklin Liberty Federal | VanEck CEF vs. Hartford Municipal Opportunities | VanEck CEF vs. IQ MacKay Municipal | VanEck CEF vs. First Trust 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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