Correlation Between Hartford Municipal and IQ MacKay

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

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

Diversification Opportunities for Hartford Municipal and IQ MacKay

0.97

Correlation Coefficient

Hartford Municipal  IQ MacKay

Almost no diversification

The 3 months correlation between Hartford and MMIN is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Hartford Municipal Opportuniti 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 Hartford Municipal 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 Hartford Municipal Opportunities 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 Hartford Municipal i.e., Hartford Municipal and IQ MacKay go up and down completely randomly.

Pair Corralation between Hartford Municipal and IQ MacKay

Given the investment horizon of 90 days Hartford Municipal is expected to generate 1.41 times less return on investment than IQ MacKay. In addition to that, Hartford Municipal is 1.15 times more volatile than IQ MacKay Municipal. It trades about 0.17 of its total potential returns per unit of risk. IQ MacKay Municipal is currently generating about 0.27 per unit of volatility. If you would invest  2,403  in IQ MacKay Municipal on September 12, 2024 and sell it today you would earn a total of  29.00  from holding IQ MacKay Municipal or generate 1.21% return on investment over 90 days.

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

Hartford Municipal Opportuniti  vs.  IQ MacKay Municipal

Hartford Municipal

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Hartford Municipal Opportunities are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Hartford Municipal is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

IQ MacKay Municipal

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in IQ MacKay Municipal are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy forward indicators, IQ MacKay is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Hartford Municipal and IQ MacKay

The main advantage of trading using opposite Hartford Municipal and IQ MacKay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hartford Municipal 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.

The idea behind Hartford Municipal Opportunities and IQ MacKay Municipal 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.