Correlation Between IShares Russell and IndexIQ
Can any of the company-specific risk be diversified away by investing in both IShares Russell 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 Russell and IndexIQ into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Russell Mid Cap and IndexIQ, you can compare the effects of market volatilities on IShares Russell 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 Russell with a short position of IndexIQ. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Russell and IndexIQ.
Diversification Opportunities for IShares Russell and IndexIQ
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between IShares and IndexIQ is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding iShares Russell Mid Cap and IndexIQ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IndexIQ and IShares Russell 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 Russell Mid 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 Russell i.e., IShares Russell and IndexIQ go up and down completely randomly.
Pair Corralation between IShares Russell and IndexIQ
If you would invest 7,634 in iShares Russell Mid Cap on September 3, 2024 and sell it today you would earn a total of 1,913 from holding iShares Russell Mid Cap or generate 25.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.44% |
| Values | Daily Returns |
iShares Russell Mid Cap vs. IndexIQ
Performance |
| Timeline |
| iShares Russell Mid |
| IndexIQ |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
IShares Russell and IndexIQ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Russell and IndexIQ
The main advantage of trading using opposite IShares Russell and IndexIQ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Russell 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 Russell vs. iShares Russell Mid Cap | IShares Russell vs. iShares Russell 1000 | IShares Russell vs. iShares Russell Mid Cap | IShares Russell vs. iShares Russell 3000 |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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