Correlation Between IndexIQ and WisdomTree Emerging
Can any of the company-specific risk be diversified away by investing in both IndexIQ and WisdomTree Emerging 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 and WisdomTree Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IndexIQ and WisdomTree Emerging Currency, you can compare the effects of market volatilities on IndexIQ and WisdomTree Emerging 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 with a short position of WisdomTree Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of IndexIQ and WisdomTree Emerging.
Diversification Opportunities for IndexIQ and WisdomTree Emerging
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IndexIQ and WisdomTree is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding IndexIQ and WisdomTree Emerging Currency in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Emerging and IndexIQ 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 are associated (or correlated) with WisdomTree Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Emerging has no effect on the direction of IndexIQ i.e., IndexIQ and WisdomTree Emerging go up and down completely randomly.
Pair Corralation between IndexIQ and WisdomTree Emerging
Given the investment horizon of 90 days IndexIQ is expected to generate 1.2 times less return on investment than WisdomTree Emerging. In addition to that, IndexIQ is 2.58 times more volatile than WisdomTree Emerging Currency. It trades about 0.02 of its total potential returns per unit of risk. WisdomTree Emerging Currency is currently generating about 0.05 per unit of volatility. If you would invest 1,645 in WisdomTree Emerging Currency on September 3, 2024 and sell it today you would earn a total of 164.00 from holding WisdomTree Emerging Currency or generate 9.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 30.77% |
| Values | Daily Returns |
IndexIQ vs. WisdomTree Emerging Currency
Performance |
| Timeline |
| IndexIQ |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| WisdomTree Emerging |
IndexIQ and WisdomTree Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IndexIQ and WisdomTree Emerging
The main advantage of trading using opposite IndexIQ and WisdomTree Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IndexIQ position performs unexpectedly, WisdomTree Emerging 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 WisdomTree Emerging will offset losses from the drop in WisdomTree Emerging's long position.| IndexIQ vs. VanEck Natural Resources | IndexIQ vs. IQ Merger Arbitrage | IndexIQ vs. SPDR SP Global | IndexIQ vs. IQ Hedge Multi Strategy |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |