Correlation Between Investment Managers and IndexIQ
Can any of the company-specific risk be diversified away by investing in both Investment Managers 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 Investment Managers and IndexIQ into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Investment Managers Series and IndexIQ, you can compare the effects of market volatilities on Investment Managers 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 Investment Managers with a short position of IndexIQ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Investment Managers and IndexIQ.
Diversification Opportunities for Investment Managers and IndexIQ
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Investment and IndexIQ is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Investment Managers Series and IndexIQ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IndexIQ and Investment Managers 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 Investment Managers Series 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 Investment Managers i.e., Investment Managers and IndexIQ go up and down completely randomly.
Pair Corralation between Investment Managers and IndexIQ
If you would invest 1,515 in Investment Managers Series on September 4, 2024 and sell it today you would earn a total of 58.00 from holding Investment Managers Series or generate 3.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Investment Managers Series vs. IndexIQ
Performance |
| Timeline |
| Investment Managers |
| IndexIQ |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Investment Managers and IndexIQ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Investment Managers and IndexIQ
The main advantage of trading using opposite Investment Managers and IndexIQ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Investment Managers 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.| Investment Managers vs. VanEck Inflation Allocation | Investment Managers vs. Horizon Kinetics Inflation | Investment Managers vs. SPDR SSgA Multi Asset | Investment Managers vs. Simplify Interest Rate |
| IndexIQ vs. VanEck Inflation Allocation | IndexIQ vs. Simplify Interest Rate | IndexIQ vs. Quadratic Deflation ETF | IndexIQ vs. Investment Managers Series |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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