Correlation Between Columbia Multi and IQ MacKay
Can any of the company-specific risk be diversified away by investing in both Columbia Multi and IQ MacKay 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 Columbia Multi and IQ MacKay into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Columbia Multi Sector Municipal and IQ MacKay Municipal, you can compare the effects of market volatilities on Columbia Multi and IQ MacKay 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 Columbia Multi with a short position of IQ MacKay. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Multi and IQ MacKay.
Diversification Opportunities for Columbia Multi and IQ MacKay
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Columbia and MMIN is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Multi Sector Municipa and IQ MacKay Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IQ MacKay Municipal and Columbia Multi 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 Columbia Multi Sector Municipal are associated (or correlated) with IQ MacKay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IQ MacKay Municipal has no effect on the direction of Columbia Multi i.e., Columbia Multi and IQ MacKay go up and down completely randomly.
Pair Corralation between Columbia Multi and IQ MacKay
Given the investment horizon of 90 days Columbia Multi is expected to generate 1.1 times less return on investment than IQ MacKay. In addition to that, Columbia Multi is 1.03 times more volatile than IQ MacKay Municipal. It trades about 0.04 of its total potential returns per unit of risk. IQ MacKay Municipal is currently generating about 0.04 per unit of volatility. If you would invest 2,297 in IQ MacKay Municipal on August 27, 2024 and sell it today you would earn a total of 122.00 from holding IQ MacKay Municipal or generate 5.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Columbia Multi Sector Municipa vs. IQ MacKay Municipal
Performance |
| Timeline |
| Columbia Multi Sector |
| IQ MacKay Municipal |
Columbia Multi and IQ MacKay Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbia Multi and IQ MacKay
The main advantage of trading using opposite Columbia Multi and IQ MacKay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Multi position performs unexpectedly, IQ MacKay 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 IQ MacKay will offset losses from the drop in IQ MacKay's long position.| Columbia Multi vs. SSGA Active Trust | Columbia Multi vs. SPDR MarketAxess Investment | Columbia Multi vs. SSGA Active Trust |
| IQ MacKay vs. Franklin Liberty Intermediate | IQ MacKay vs. Hartford Municipal Opportunities | IQ MacKay 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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