Correlation Between IndexIQ Active and SPDR Bloomberg
Can any of the company-specific risk be diversified away by investing in both IndexIQ Active and SPDR Bloomberg 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 IndexIQ Active and SPDR Bloomberg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IndexIQ Active ETF and SPDR Bloomberg Barclays, you can compare the effects of market volatilities on IndexIQ Active and SPDR Bloomberg 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 IndexIQ Active with a short position of SPDR Bloomberg. Check out your portfolio center. Please also check ongoing floating volatility patterns of IndexIQ Active and SPDR Bloomberg.
Diversification Opportunities for IndexIQ Active and SPDR Bloomberg
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IndexIQ and SPDR is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding IndexIQ Active ETF and SPDR Bloomberg Barclays in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Bloomberg Barclays and IndexIQ Active 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 IndexIQ Active ETF are associated (or correlated) with SPDR Bloomberg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Bloomberg Barclays has no effect on the direction of IndexIQ Active i.e., IndexIQ Active and SPDR Bloomberg go up and down completely randomly.
Pair Corralation between IndexIQ Active and SPDR Bloomberg
Given the investment horizon of 90 days IndexIQ Active is expected to generate 1.16 times less return on investment than SPDR Bloomberg. But when comparing it to its historical volatility, IndexIQ Active ETF is 1.36 times less risky than SPDR Bloomberg. It trades about 0.12 of its potential returns per unit of risk. SPDR Bloomberg Barclays is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2,309 in SPDR Bloomberg Barclays on August 26, 2024 and sell it today you would earn a total of 115.00 from holding SPDR Bloomberg Barclays or generate 4.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
IndexIQ Active ETF vs. SPDR Bloomberg Barclays
Performance |
| Timeline |
| IndexIQ Active ETF |
| SPDR Bloomberg Barclays |
IndexIQ Active and SPDR Bloomberg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IndexIQ Active and SPDR Bloomberg
The main advantage of trading using opposite IndexIQ Active and SPDR Bloomberg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IndexIQ Active position performs unexpectedly, SPDR Bloomberg 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 SPDR Bloomberg will offset losses from the drop in SPDR Bloomberg's long position.| IndexIQ Active vs. SPDR Bloomberg Barclays | IndexIQ Active vs. FlexShares STOXX Global | IndexIQ Active vs. BNY Mellon ETF | IndexIQ Active vs. American Century Sustainable |
| SPDR Bloomberg vs. iShares JP Morgan | SPDR Bloomberg vs. Invesco Emerging Markets | SPDR Bloomberg vs. iShares JP Morgan | SPDR Bloomberg vs. iShares JP Morgan |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |