Correlation Between Nine Energy and IQ MacKay
Can any of the company-specific risk be diversified away by investing in both Nine Energy 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 Nine Energy and IQ MacKay into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nine Energy Service and IQ MacKay Municipal, you can compare the effects of market volatilities on Nine Energy 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 Nine Energy with a short position of IQ MacKay. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nine Energy and IQ MacKay.
Diversification Opportunities for Nine Energy and IQ MacKay
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nine and MMIN is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Nine Energy Service 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 Nine Energy 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 Nine Energy Service 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 Nine Energy i.e., Nine Energy and IQ MacKay go up and down completely randomly.
Pair Corralation between Nine Energy and IQ MacKay
Given the investment horizon of 90 days Nine Energy Service is expected to under-perform the IQ MacKay. In addition to that, Nine Energy is 21.82 times more volatile than IQ MacKay Municipal. It trades about -0.22 of its total potential returns per unit of risk. IQ MacKay Municipal is currently generating about -0.15 per unit of volatility. If you would invest 2,411 in IQ MacKay Municipal on September 23, 2024 and sell it today you would lose (24.00) from holding IQ MacKay Municipal or give up 1.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nine Energy Service vs. IQ MacKay Municipal
Performance |
| Timeline |
| Nine Energy Service |
| IQ MacKay Municipal |
Nine Energy and IQ MacKay Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nine Energy and IQ MacKay
The main advantage of trading using opposite Nine Energy and IQ MacKay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nine Energy 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.| Nine Energy vs. Liberty Oilfield Services | Nine Energy vs. ProFrac Holding Corp | Nine Energy vs. Helix Energy Solutions | Nine Energy vs. Newpark Resources |
| IQ MacKay vs. Formidable Fortress ETF | IQ MacKay vs. Sonida Senior Living | IQ MacKay vs. China Yuchai International | IQ MacKay vs. Nine Energy Service |
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 CEOs Directory module to screen CEOs from public companies around the world.
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