Correlation Between IQ 50 and IQ Candriam

Can any of the company-specific risk be diversified away by investing in both IQ 50 and IQ Candriam 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 IQ 50 and IQ Candriam into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between IQ 50 Percent and IQ Candriam ESG, you can compare the effects of market volatilities on IQ 50 and IQ Candriam 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 IQ 50 with a short position of IQ Candriam. Check out your portfolio center. Please also check ongoing floating volatility patterns of IQ 50 and IQ Candriam.

Diversification Opportunities for IQ 50 and IQ Candriam

0.93

Correlation Coefficient

IQ 50  IQ Candriam

Almost no diversification

The 3 months correlation between HFXI and IQSI is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding IQ 50 Percent and IQ Candriam ESG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IQ Candriam ESG and IQ 50 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 IQ 50 Percent are associated (or correlated) with IQ Candriam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IQ Candriam ESG has no effect on the direction of IQ 50 i.e., IQ 50 and IQ Candriam go up and down completely randomly.

Pair Corralation between IQ 50 and IQ Candriam

Given the investment horizon of 90 days IQ 50 Percent is expected to generate 0.88 times more return on investment than IQ Candriam. However, IQ 50 Percent is 1.14 times less risky than IQ Candriam. It trades about -0.01 of its potential returns per unit of risk. IQ Candriam ESG is currently generating about -0.08 per unit of risk. If you would invest  2,713  in IQ 50 Percent on September 14, 2024 and sell it today you would lose (20.00) from holding IQ 50 Percent or give up 0.74% of portfolio value over 90 days.

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

IQ 50 Percent  vs.  IQ Candriam ESG

IQ 50 Percent

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days IQ 50 Percent has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, IQ 50 is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

IQ Candriam ESG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IQ Candriam ESG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, IQ Candriam is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with IQ 50 and IQ Candriam

The main advantage of trading using opposite IQ 50 and IQ Candriam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IQ 50 position performs unexpectedly, IQ Candriam 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 Candriam will offset losses from the drop in IQ Candriam's long position.

The idea behind IQ 50 Percent and IQ Candriam ESG 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.