Correlation Between FlexShares International and IndexIQ
Can any of the company-specific risk be diversified away by investing in both FlexShares International 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 FlexShares International and IndexIQ into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FlexShares International Quality and IndexIQ, you can compare the effects of market volatilities on FlexShares International 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 FlexShares International with a short position of IndexIQ. Check out your portfolio center. Please also check ongoing floating volatility patterns of FlexShares International and IndexIQ.
Diversification Opportunities for FlexShares International and IndexIQ
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between FlexShares and IndexIQ is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding FlexShares International Quali and IndexIQ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IndexIQ and FlexShares International 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 FlexShares International Quality 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 FlexShares International i.e., FlexShares International and IndexIQ go up and down completely randomly.
Pair Corralation between FlexShares International and IndexIQ
If you would invest 2,750 in FlexShares International Quality on November 3, 2024 and sell it today you would earn a total of 130.00 from holding FlexShares International Quality or generate 4.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
FlexShares International Quali vs. IndexIQ
Performance |
| Timeline |
| FlexShares International |
| IndexIQ |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
FlexShares International and IndexIQ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FlexShares International and IndexIQ
The main advantage of trading using opposite FlexShares International and IndexIQ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FlexShares International 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.| FlexShares International vs. FlexShares International Quality | FlexShares International vs. ALPS International Sector | FlexShares International vs. FlexShares Quality Dividend |
| IndexIQ vs. IQ 50 Percent | IndexIQ vs. FlexShares International Quality | IndexIQ vs. Invesco SP International | IndexIQ vs. American Century Quality |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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