Correlation Between Mairs Power and IndexIQ Active
Can any of the company-specific risk be diversified away by investing in both Mairs Power and IndexIQ Active 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 Mairs Power and IndexIQ Active into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mairs Power Minnesota and IndexIQ Active ETF, you can compare the effects of market volatilities on Mairs Power and IndexIQ Active 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 Mairs Power with a short position of IndexIQ Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mairs Power and IndexIQ Active.
Diversification Opportunities for Mairs Power and IndexIQ Active
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Mairs and IndexIQ is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Mairs Power Minnesota and IndexIQ Active ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IndexIQ Active ETF and Mairs Power 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 Mairs Power Minnesota are associated (or correlated) with IndexIQ Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IndexIQ Active ETF has no effect on the direction of Mairs Power i.e., Mairs Power and IndexIQ Active go up and down completely randomly.
Pair Corralation between Mairs Power and IndexIQ Active
Given the investment horizon of 90 days Mairs Power is expected to generate 3.07 times less return on investment than IndexIQ Active. In addition to that, Mairs Power is 1.58 times more volatile than IndexIQ Active ETF. It trades about 0.01 of its total potential returns per unit of risk. IndexIQ Active ETF is currently generating about 0.05 per unit of volatility. If you would invest 2,111 in IndexIQ Active ETF on August 25, 2024 and sell it today you would earn a total of 44.00 from holding IndexIQ Active ETF or generate 2.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mairs Power Minnesota vs. IndexIQ Active ETF
Performance |
| Timeline |
| Mairs Power Minnesota |
| IndexIQ Active ETF |
Mairs Power and IndexIQ Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mairs Power and IndexIQ Active
The main advantage of trading using opposite Mairs Power and IndexIQ Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mairs Power position performs unexpectedly, IndexIQ Active 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 Active will offset losses from the drop in IndexIQ Active's long position.| Mairs Power vs. BlackRock Intermediate Muni | Mairs Power vs. IQ MacKay Municipal | Mairs Power vs. Overlay Shares Municipal | Mairs Power vs. IQ MacKay Municipal |
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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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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