Correlation Between GraniteShares 15x and IQ MacKay

Can any of the company-specific risk be diversified away by investing in both GraniteShares 15x 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 GraniteShares 15x and IQ MacKay into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GraniteShares 15x Long and IQ MacKay Municipal, you can compare the effects of market volatilities on GraniteShares 15x 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 GraniteShares 15x with a short position of IQ MacKay. Check out your portfolio center. Please also check ongoing floating volatility patterns of GraniteShares 15x and IQ MacKay.

Diversification Opportunities for GraniteShares 15x and IQ MacKay

-0.45

Correlation Coefficient

GraniteShares 15x  IQ MacKay

Very good diversification

The 3 months correlation between GraniteShares and MMIN is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding GraniteShares 15x Long 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 GraniteShares 15x 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 GraniteShares 15x Long 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 GraniteShares 15x i.e., GraniteShares 15x and IQ MacKay go up and down completely randomly.

Pair Corralation between GraniteShares 15x and IQ MacKay

Given the investment horizon of 90 days GraniteShares 15x Long is expected to generate 15.58 times more return on investment than IQ MacKay. However, GraniteShares 15x is 15.58 times more volatile than IQ MacKay Municipal. It trades about 0.17 of its potential returns per unit of risk. IQ MacKay Municipal is currently generating about 0.04 per unit of risk. If you would invest  4,647  in GraniteShares 15x Long on September 5, 2024 and sell it today you would earn a total of  2,733  from holding GraniteShares 15x Long or generate 58.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

GraniteShares 15x Long  vs.  IQ MacKay Municipal

GraniteShares 15x Long

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GraniteShares 15x Long are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating fundamental indicators, GraniteShares 15x disclosed solid returns over the last few months and may actually be approaching a breakup point.

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 current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with GraniteShares 15x and IQ MacKay

The main advantage of trading using opposite GraniteShares 15x and IQ MacKay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GraniteShares 15x 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 GraniteShares 15x Long 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.

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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.