Correlation Between FlexShares Real and IndexIQ
Can any of the company-specific risk be diversified away by investing in both FlexShares Real and IndexIQ 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 FlexShares Real and IndexIQ into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FlexShares Real Assets and IndexIQ, you can compare the effects of market volatilities on FlexShares Real and IndexIQ 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 FlexShares Real with a short position of IndexIQ. Check out your portfolio center. Please also check ongoing floating volatility patterns of FlexShares Real and IndexIQ.
Diversification Opportunities for FlexShares Real and IndexIQ
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between FlexShares and IndexIQ is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding FlexShares Real Assets and IndexIQ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IndexIQ and FlexShares Real 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 FlexShares Real Assets are associated (or correlated) with IndexIQ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IndexIQ has no effect on the direction of FlexShares Real i.e., FlexShares Real and IndexIQ go up and down completely randomly.
Pair Corralation between FlexShares Real and IndexIQ
If you would invest 3,147 in FlexShares Real Assets on September 2, 2024 and sell it today you would earn a total of 95.00 from holding FlexShares Real Assets or generate 3.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 1.56% |
| Values | Daily Returns |
FlexShares Real Assets vs. IndexIQ
Performance |
| Timeline |
| FlexShares Real Assets |
| IndexIQ |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
FlexShares Real and IndexIQ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FlexShares Real and IndexIQ
The main advantage of trading using opposite FlexShares Real and IndexIQ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FlexShares Real position performs unexpectedly, IndexIQ 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 IndexIQ will offset losses from the drop in IndexIQ's long position.| FlexShares Real vs. WisdomTree Interest Rate | FlexShares Real vs. First Trust Developed | FlexShares Real vs. VictoryShares International Volatility |
| IndexIQ vs. VictoryShares Discovery Enhanced | IndexIQ vs. First Trust Mid | IndexIQ vs. First Trust Small |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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