Correlation Between VanEck Natural and IndexIQ
Can any of the company-specific risk be diversified away by investing in both VanEck Natural and IndexIQ 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 VanEck Natural and IndexIQ into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VanEck Natural Resources and IndexIQ, you can compare the effects of market volatilities on VanEck Natural and IndexIQ 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 VanEck Natural with a short position of IndexIQ. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Natural and IndexIQ.
Diversification Opportunities for VanEck Natural and IndexIQ
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between VanEck and IndexIQ is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Natural Resources and IndexIQ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IndexIQ and VanEck Natural 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 VanEck Natural Resources are associated (or correlated) with IndexIQ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IndexIQ has no effect on the direction of VanEck Natural i.e., VanEck Natural and IndexIQ go up and down completely randomly.
Pair Corralation between VanEck Natural and IndexIQ
If you would invest 5,064 in VanEck Natural Resources on September 1, 2024 and sell it today you would earn a total of 34.00 from holding VanEck Natural Resources or generate 0.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
VanEck Natural Resources vs. IndexIQ
Performance |
| Timeline |
| VanEck Natural Resources |
| IndexIQ |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
VanEck Natural and IndexIQ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck Natural and IndexIQ
The main advantage of trading using opposite VanEck Natural and IndexIQ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Natural position performs unexpectedly, IndexIQ 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 will offset losses from the drop in IndexIQ's long position.| VanEck Natural vs. Invesco MSCI Global | VanEck Natural vs. WisdomTree Continuous Commodity | VanEck Natural vs. VanEck UraniumNuclear Energy | VanEck Natural vs. SPDR SP Global |
| IndexIQ vs. IQ Hedge Multi Strategy | IndexIQ vs. IQ Merger Arbitrage | IndexIQ vs. WisdomTree Emerging Currency | IndexIQ vs. ProShares Large Cap |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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