Correlation Between SPDR Nuveen and IQ MacKay

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

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

Diversification Opportunities for SPDR Nuveen and IQ MacKay

0.97

Correlation Coefficient

SPDR Nuveen  IQ MacKay

Almost no diversification

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

Pair Corralation between SPDR Nuveen and IQ MacKay

Considering the 90-day investment horizon SPDR Nuveen Bloomberg is expected to under-perform the IQ MacKay. But the etf apears to be less risky and, when comparing its historical volatility, SPDR Nuveen Bloomberg is 1.31 times less risky than IQ MacKay. The etf trades about -0.01 of its potential returns per unit of risk. The IQ MacKay Municipal is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  2,369  in IQ MacKay Municipal on December 26, 2024 and sell it today you would lose (4.00) from holding IQ MacKay Municipal or give up 0.17% of portfolio value over 90 days.

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

SPDR Nuveen Bloomberg  vs.  IQ MacKay Municipal

SPDR Nuveen Bloomberg

Risk-Adjusted Performance

Very Weak

Over the last 90 days SPDR Nuveen Bloomberg has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, SPDR Nuveen is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

IQ MacKay Municipal

Risk-Adjusted Performance

Very Weak

Over the last 90 days IQ MacKay Municipal has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward indicators, IQ MacKay is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with SPDR Nuveen and IQ MacKay

The main advantage of trading using opposite SPDR Nuveen and IQ MacKay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Nuveen 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 SPDR Nuveen Bloomberg 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.