Correlation Between IShares SP and IndexIQ
Can any of the company-specific risk be diversified away by investing in both IShares SP 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 IShares SP and IndexIQ into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares SP Small Cap and IndexIQ, you can compare the effects of market volatilities on IShares SP 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 IShares SP with a short position of IndexIQ. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares SP and IndexIQ.
Diversification Opportunities for IShares SP and IndexIQ
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and IndexIQ is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding iShares SP Small Cap and IndexIQ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IndexIQ and IShares SP 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 iShares SP Small Cap 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 IShares SP i.e., IShares SP and IndexIQ go up and down completely randomly.
Pair Corralation between IShares SP and IndexIQ
If you would invest 10,599 in iShares SP Small Cap on August 24, 2024 and sell it today you would earn a total of 773.00 from holding iShares SP Small Cap or generate 7.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.35% |
| Values | Daily Returns |
iShares SP Small Cap vs. IndexIQ
Performance |
| Timeline |
| iShares SP Small |
| IndexIQ |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
IShares SP and IndexIQ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares SP and IndexIQ
The main advantage of trading using opposite IShares SP and IndexIQ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares SP 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.| IShares SP vs. iShares SP Small Cap | IShares SP vs. iShares SP Mid Cap | IShares SP vs. iShares SP Mid Cap | IShares SP vs. iShares SP 500 |
| IndexIQ vs. VictoryShares Discovery Enhanced | IndexIQ vs. First Trust Mid | IndexIQ vs. First Trust Small |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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