Correlation Between International Business and IndexIQ
Can any of the company-specific risk be diversified away by investing in both International Business 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 International Business and IndexIQ into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Business Machines and IndexIQ, you can compare the effects of market volatilities on International Business 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 International Business with a short position of IndexIQ. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Business and IndexIQ.
Diversification Opportunities for International Business and IndexIQ
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between International and IndexIQ is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding International Business Machine and IndexIQ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IndexIQ and International Business 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 International Business Machines 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 International Business i.e., International Business and IndexIQ go up and down completely randomly.
Pair Corralation between International Business and IndexIQ
If you would invest (100.00) in IndexIQ on December 1, 2024 and sell it today you would earn a total of 100.00 from holding IndexIQ or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
International Business Machine vs. IndexIQ
Performance |
| Timeline |
| International Business |
| IndexIQ |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
International Business and IndexIQ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Business and IndexIQ
The main advantage of trading using opposite International Business and IndexIQ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Business 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.| International Business vs. Infosys Ltd ADR | International Business vs. Cognizant Technology Solutions | International Business vs. FiscalNote Holdings | International Business vs. Innodata |
| 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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