Correlation Between Xtrackers Emerging and IndexIQ Active
Can any of the company-specific risk be diversified away by investing in both Xtrackers Emerging and IndexIQ Active 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 Xtrackers Emerging and IndexIQ Active into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers Emerging Markets and IndexIQ Active ETF, you can compare the effects of market volatilities on Xtrackers Emerging and IndexIQ Active 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 Xtrackers Emerging with a short position of IndexIQ Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers Emerging and IndexIQ Active.
Diversification Opportunities for Xtrackers Emerging and IndexIQ Active
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Xtrackers and IndexIQ is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers Emerging Markets and IndexIQ Active ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IndexIQ Active ETF and Xtrackers Emerging 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 Xtrackers Emerging Markets are associated (or correlated) with IndexIQ Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IndexIQ Active ETF has no effect on the direction of Xtrackers Emerging i.e., Xtrackers Emerging and IndexIQ Active go up and down completely randomly.
Pair Corralation between Xtrackers Emerging and IndexIQ Active
Given the investment horizon of 90 days Xtrackers Emerging Markets is expected to under-perform the IndexIQ Active. In addition to that, Xtrackers Emerging is 4.15 times more volatile than IndexIQ Active ETF. It trades about -0.16 of its total potential returns per unit of risk. IndexIQ Active ETF is currently generating about 0.06 per unit of volatility. If you would invest 2,109 in IndexIQ Active ETF on August 29, 2024 and sell it today you would earn a total of 8.00 from holding IndexIQ Active ETF or generate 0.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers Emerging Markets vs. IndexIQ Active ETF
Performance |
| Timeline |
| Xtrackers Emerging |
| IndexIQ Active ETF |
Xtrackers Emerging and IndexIQ Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers Emerging and IndexIQ Active
The main advantage of trading using opposite Xtrackers Emerging and IndexIQ Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers Emerging position performs unexpectedly, IndexIQ Active 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 Active will offset losses from the drop in IndexIQ Active's long position.| Xtrackers Emerging vs. Xtrackers MSCI Emerging | Xtrackers Emerging vs. FlexShares Morningstar Emerging | Xtrackers Emerging vs. Invesco SP Emerging | Xtrackers Emerging vs. First Trust Emerging |
| IndexIQ Active vs. SPDR Bloomberg Barclays | IndexIQ Active vs. FlexShares STOXX Global | IndexIQ Active vs. BNY Mellon ETF | IndexIQ Active vs. American Century Sustainable |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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