Correlation Between IndexIQ and IndexIQ ETF
Can any of the company-specific risk be diversified away by investing in both IndexIQ 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 IndexIQ and IndexIQ ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IndexIQ and IndexIQ ETF Trust, you can compare the effects of market volatilities on IndexIQ 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 IndexIQ with a short position of IndexIQ ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of IndexIQ and IndexIQ ETF.
Diversification Opportunities for IndexIQ and IndexIQ ETF
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IndexIQ and IndexIQ is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding IndexIQ 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 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 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 IndexIQ i.e., IndexIQ and IndexIQ ETF go up and down completely randomly.
Pair Corralation between IndexIQ and IndexIQ ETF
If you would invest 2,080 in IndexIQ ETF Trust on September 4, 2024 and sell it today you would earn a total of 632.00 from holding IndexIQ ETF Trust or generate 30.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.35% |
| Values | Daily Returns |
IndexIQ vs. IndexIQ ETF Trust
Performance |
| Timeline |
| IndexIQ |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| IndexIQ ETF Trust |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
IndexIQ and IndexIQ ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IndexIQ and IndexIQ ETF
The main advantage of trading using opposite IndexIQ and IndexIQ ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IndexIQ 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.| 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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