Correlation Between NYLI MacKay and IShares IBonds

Can any of the company-specific risk be diversified away by investing in both NYLI MacKay and IShares IBonds 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 NYLI MacKay and IShares IBonds into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between NYLI MacKay Core and iShares iBonds Dec, you can compare the effects of market volatilities on NYLI MacKay and IShares IBonds 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 NYLI MacKay with a short position of IShares IBonds. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYLI MacKay and IShares IBonds.

Diversification Opportunities for NYLI MacKay and IShares IBonds

0.93

Correlation Coefficient

NYLI MacKay  IShares IBonds

Almost no diversification

The 3 months correlation between NYLI and IShares is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding NYLI MacKay Core and iShares iBonds Dec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares iBonds Dec and NYLI 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 NYLI MacKay Core are associated (or correlated) with IShares IBonds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares iBonds Dec has no effect on the direction of NYLI MacKay i.e., NYLI MacKay and IShares IBonds go up and down completely randomly.

Pair Corralation between NYLI MacKay and IShares IBonds

Given the investment horizon of 90 days NYLI MacKay Core is expected to generate 2.48 times more return on investment than IShares IBonds. However, NYLI MacKay is 2.48 times more volatile than iShares iBonds Dec. It trades about 0.18 of its potential returns per unit of risk. iShares iBonds Dec is currently generating about 0.26 per unit of risk. If you would invest  2,061  in NYLI MacKay Core on December 19, 2024 and sell it today you would earn a total of  54.00  from holding NYLI MacKay Core or generate 2.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

NYLI MacKay Core  vs.  iShares iBonds Dec

NYLI MacKay Core

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in NYLI MacKay Core are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong essential indicators, NYLI MacKay is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

iShares iBonds Dec

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in iShares iBonds Dec are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable fundamental indicators, IShares IBonds is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with NYLI MacKay and IShares IBonds

The main advantage of trading using opposite NYLI MacKay and IShares IBonds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYLI MacKay position performs unexpectedly, IShares IBonds 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 IShares IBonds will offset losses from the drop in IShares IBonds' long position.

The idea behind NYLI MacKay Core and iShares iBonds Dec pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.