Correlation Between IndexIQ Active and PIMCO ETF
Can any of the company-specific risk be diversified away by investing in both IndexIQ Active and PIMCO ETF 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 IndexIQ Active and PIMCO ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IndexIQ Active ETF and PIMCO ETF Trust, you can compare the effects of market volatilities on IndexIQ Active and PIMCO ETF 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 IndexIQ Active with a short position of PIMCO ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of IndexIQ Active and PIMCO ETF.
Diversification Opportunities for IndexIQ Active and PIMCO ETF
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IndexIQ and PIMCO is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding IndexIQ Active ETF and PIMCO ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PIMCO ETF Trust and IndexIQ Active 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 IndexIQ Active ETF are associated (or correlated) with PIMCO ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PIMCO ETF Trust has no effect on the direction of IndexIQ Active i.e., IndexIQ Active and PIMCO ETF go up and down completely randomly.
Pair Corralation between IndexIQ Active and PIMCO ETF
Given the investment horizon of 90 days IndexIQ Active ETF is expected to generate 0.78 times more return on investment than PIMCO ETF. However, IndexIQ Active ETF is 1.28 times less risky than PIMCO ETF. It trades about 0.13 of its potential returns per unit of risk. PIMCO ETF Trust is currently generating about 0.06 per unit of risk. If you would invest 2,144 in IndexIQ Active ETF on August 29, 2024 and sell it today you would earn a total of 18.00 from holding IndexIQ Active ETF or generate 0.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
IndexIQ Active ETF vs. PIMCO ETF Trust
Performance |
| Timeline |
| IndexIQ Active ETF |
| PIMCO ETF Trust |
IndexIQ Active and PIMCO ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IndexIQ Active and PIMCO ETF
The main advantage of trading using opposite IndexIQ Active and PIMCO ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IndexIQ Active position performs unexpectedly, PIMCO ETF 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 PIMCO ETF will offset losses from the drop in PIMCO ETF's long position.| IndexIQ Active vs. BlackRock High Yield | IndexIQ Active vs. Dimensional ETF Trust | IndexIQ Active vs. JP Morgan Exchange Traded | IndexIQ Active vs. Janus Detroit Street |
| PIMCO ETF vs. BlackRock Intermediate Muni | PIMCO ETF vs. SSGA Active Trust | PIMCO ETF vs. SSGA Active Trust | PIMCO ETF vs. SPDR Nuveen Municipal |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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