Correlation Between NYSE Composite and IQ MacKay
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and IQ MacKay into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and IQ MacKay Municipal, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of IQ MacKay. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and IQ MacKay.
Diversification Opportunities for NYSE Composite and IQ MacKay
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between NYSE and MMIT is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite 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 NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and IQ MacKay go up and down completely randomly.
Pair Corralation between NYSE Composite and IQ MacKay
Assuming the 90 days trading horizon NYSE Composite is expected to generate 3.14 times more return on investment than IQ MacKay. However, NYSE Composite is 3.14 times more volatile than IQ MacKay Municipal. It trades about 0.14 of its potential returns per unit of risk. IQ MacKay Municipal is currently generating about 0.08 per unit of risk. If you would invest 1,613,685 in NYSE Composite on September 2, 2024 and sell it today you would earn a total of 413,519 from holding NYSE Composite or generate 25.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. IQ MacKay Municipal
Performance |
| Timeline |
NYSE Composite and IQ MacKay Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
IQ MacKay Municipal
Pair trading matchups for IQ MacKay
Pair Trading with NYSE Composite and IQ MacKay
The main advantage of trading using opposite NYSE Composite and IQ MacKay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Simon Property Group | NYSE Composite vs. Merit Medical Systems | NYSE Composite vs. Catalent | NYSE Composite vs. Titan Machinery |
| IQ MacKay vs. IQ MacKay Municipal | IQ MacKay vs. Hartford Municipal Opportunities | IQ MacKay vs. Columbia Multi Sector Municipal | IQ MacKay vs. American Century Diversified |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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