Correlation Between Invesco Alerian and IndexIQ ETF
Can any of the company-specific risk be diversified away by investing in both Invesco Alerian and IndexIQ 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 Invesco Alerian and IndexIQ ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco Alerian Galaxy and IndexIQ ETF Trust, you can compare the effects of market volatilities on Invesco Alerian and IndexIQ 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 Invesco Alerian with a short position of IndexIQ ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Alerian and IndexIQ ETF.
Diversification Opportunities for Invesco Alerian and IndexIQ ETF
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Invesco and IndexIQ is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Alerian Galaxy and IndexIQ ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IndexIQ ETF Trust and Invesco Alerian 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 Invesco Alerian Galaxy are associated (or correlated) with IndexIQ ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IndexIQ ETF Trust has no effect on the direction of Invesco Alerian i.e., Invesco Alerian and IndexIQ ETF go up and down completely randomly.
Pair Corralation between Invesco Alerian and IndexIQ ETF
Given the investment horizon of 90 days Invesco Alerian Galaxy is expected to generate 3.39 times more return on investment than IndexIQ ETF. However, Invesco Alerian is 3.39 times more volatile than IndexIQ ETF Trust. It trades about 0.32 of its potential returns per unit of risk. IndexIQ ETF Trust is currently generating about -0.16 per unit of risk. If you would invest 2,258 in Invesco Alerian Galaxy on August 26, 2024 and sell it today you would earn a total of 547.00 from holding Invesco Alerian Galaxy or generate 24.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco Alerian Galaxy vs. IndexIQ ETF Trust
Performance |
| Timeline |
| Invesco Alerian Galaxy |
| IndexIQ ETF Trust |
Invesco Alerian and IndexIQ ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Alerian and IndexIQ ETF
The main advantage of trading using opposite Invesco Alerian and IndexIQ ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Alerian position performs unexpectedly, IndexIQ 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 IndexIQ ETF will offset losses from the drop in IndexIQ ETF's long position.| Invesco Alerian vs. Grayscale Bitcoin Trust | Invesco Alerian vs. Siren Nasdaq NexGen | Invesco Alerian vs. Grayscale Bitcoin Mini | Invesco Alerian vs. First Trust SkyBridge |
| IndexIQ ETF vs. IndexIQ ETF Trust | IndexIQ ETF vs. IndexIQ ETF Trust | IndexIQ ETF vs. ProShares SP Kensho | IndexIQ ETF vs. Invesco Alerian Galaxy |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |