Correlation Between VanEck Vectors and IQ MacKay
Can any of the company-specific risk be diversified away by investing in both VanEck Vectors 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 VanEck Vectors and IQ MacKay into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VanEck Vectors ETF and IQ MacKay Municipal, you can compare the effects of market volatilities on VanEck Vectors 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 VanEck Vectors with a short position of IQ MacKay. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Vectors and IQ MacKay.
Diversification Opportunities for VanEck Vectors and IQ MacKay
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between VanEck and MMIN is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Vectors ETF 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 VanEck Vectors 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 VanEck Vectors ETF 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 VanEck Vectors i.e., VanEck Vectors and IQ MacKay go up and down completely randomly.
Pair Corralation between VanEck Vectors and IQ MacKay
Considering the 90-day investment horizon VanEck Vectors is expected to generate 1.28 times less return on investment than IQ MacKay. But when comparing it to its historical volatility, VanEck Vectors ETF is 1.12 times less risky than IQ MacKay. It trades about 0.07 of its potential returns per unit of risk. IQ MacKay Municipal is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 2,403 in IQ MacKay Municipal on August 27, 2024 and sell it today you would earn a total of 16.00 from holding IQ MacKay Municipal or generate 0.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
VanEck Vectors ETF vs. IQ MacKay Municipal
Performance |
| Timeline |
| VanEck Vectors ETF |
| IQ MacKay Municipal |
VanEck Vectors and IQ MacKay Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck Vectors and IQ MacKay
The main advantage of trading using opposite VanEck Vectors and IQ MacKay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Vectors 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.| VanEck Vectors vs. Franklin Liberty Intermediate | VanEck Vectors vs. Hartford Municipal Opportunities | VanEck Vectors vs. IQ MacKay Municipal |
| 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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