Correlation Between IndexIQ Active and AltShares Event
Can any of the company-specific risk be diversified away by investing in both IndexIQ Active and AltShares Event 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 AltShares Event 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 AltShares Event Driven ETF, you can compare the effects of market volatilities on IndexIQ Active and AltShares Event 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 AltShares Event. Check out your portfolio center. Please also check ongoing floating volatility patterns of IndexIQ Active and AltShares Event.
Diversification Opportunities for IndexIQ Active and AltShares Event
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IndexIQ and AltShares is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding IndexIQ Active ETF and AltShares Event Driven ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AltShares Event Driven 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 AltShares Event. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AltShares Event Driven has no effect on the direction of IndexIQ Active i.e., IndexIQ Active and AltShares Event go up and down completely randomly.
Pair Corralation between IndexIQ Active and AltShares Event
Given the investment horizon of 90 days IndexIQ Active is expected to generate 1.52 times less return on investment than AltShares Event. But when comparing it to its historical volatility, IndexIQ Active ETF is 1.67 times less risky than AltShares Event. It trades about 0.06 of its potential returns per unit of risk. AltShares Event Driven ETF is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 923.00 in AltShares Event Driven ETF on August 26, 2024 and sell it today you would earn a total of 144.00 from holding AltShares Event Driven ETF or generate 15.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
IndexIQ Active ETF vs. AltShares Event Driven ETF
Performance |
| Timeline |
| IndexIQ Active ETF |
| AltShares Event Driven |
IndexIQ Active and AltShares Event Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IndexIQ Active and AltShares Event
The main advantage of trading using opposite IndexIQ Active and AltShares Event positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IndexIQ Active position performs unexpectedly, AltShares Event 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 AltShares Event will offset losses from the drop in AltShares Event's long position.| IndexIQ Active vs. First Trust Low | IndexIQ Active vs. First Trust Enhanced | IndexIQ Active vs. First Trust Tactical | IndexIQ Active vs. First Trust Managed |
| AltShares Event vs. Formidable ETF | AltShares Event vs. Xtrackers Emerging Markets | AltShares Event vs. IndexIQ Active ETF |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |