Correlation Between IQ MacKay and Spinnaker ETF

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

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

Diversification Opportunities for IQ MacKay and Spinnaker ETF

0.95

Correlation Coefficient

IQ MacKay  Spinnaker ETF

Almost no diversification

The 3 months correlation between MMIT and Spinnaker is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding IQ MacKay Municipal and Spinnaker ETF Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spinnaker ETF Series and IQ 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 IQ MacKay Municipal are associated (or correlated) with Spinnaker ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spinnaker ETF Series has no effect on the direction of IQ MacKay i.e., IQ MacKay and Spinnaker ETF go up and down completely randomly.

Pair Corralation between IQ MacKay and Spinnaker ETF

Given the investment horizon of 90 days IQ MacKay Municipal is expected to generate 1.25 times more return on investment than Spinnaker ETF. However, IQ MacKay is 1.25 times more volatile than Spinnaker ETF Series. It trades about 0.04 of its potential returns per unit of risk. Spinnaker ETF Series is currently generating about 0.03 per unit of risk. If you would invest  2,426  in IQ MacKay Municipal on September 3, 2024 and sell it today you would earn a total of  13.00  from holding IQ MacKay Municipal or generate 0.54% return on investment over 90 days.

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

IQ MacKay Municipal  vs.  Spinnaker ETF Series

IQ MacKay Municipal

Risk-Adjusted Performance

2 of 100

Insignificant

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 comparatively stable forward indicators, IQ MacKay is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Spinnaker ETF Series

Risk-Adjusted Performance

2 of 100

Weak

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

Pair Trading with IQ MacKay and Spinnaker ETF

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

The idea behind IQ MacKay Municipal and Spinnaker ETF Series 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 Transaction History module to view history of all your transactions and understand their impact on performance.