Correlation Between IQ Hedge and VanEck Natural
Can any of the company-specific risk be diversified away by investing in both IQ Hedge and VanEck Natural 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 IQ Hedge and VanEck Natural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IQ Hedge Multi Strategy and VanEck Natural Resources, you can compare the effects of market volatilities on IQ Hedge and VanEck Natural 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 IQ Hedge with a short position of VanEck Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of IQ Hedge and VanEck Natural.
Diversification Opportunities for IQ Hedge and VanEck Natural
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between QAI and VanEck is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding IQ Hedge Multi Strategy and VanEck Natural Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Natural Resources and IQ Hedge 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 IQ Hedge Multi Strategy are associated (or correlated) with VanEck Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Natural Resources has no effect on the direction of IQ Hedge i.e., IQ Hedge and VanEck Natural go up and down completely randomly.
Pair Corralation between IQ Hedge and VanEck Natural
Considering the 90-day investment horizon IQ Hedge Multi Strategy is expected to generate 0.34 times more return on investment than VanEck Natural. However, IQ Hedge Multi Strategy is 2.91 times less risky than VanEck Natural. It trades about 0.1 of its potential returns per unit of risk. VanEck Natural Resources is currently generating about 0.01 per unit of risk. If you would invest 2,795 in IQ Hedge Multi Strategy on September 3, 2024 and sell it today you would earn a total of 467.00 from holding IQ Hedge Multi Strategy or generate 16.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
IQ Hedge Multi Strategy vs. VanEck Natural Resources
Performance |
| Timeline |
| IQ Hedge Multi |
| VanEck Natural Resources |
IQ Hedge and VanEck Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IQ Hedge and VanEck Natural
The main advantage of trading using opposite IQ Hedge and VanEck Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IQ Hedge position performs unexpectedly, VanEck Natural 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 VanEck Natural will offset losses from the drop in VanEck Natural's long position.| IQ Hedge vs. IQ Merger Arbitrage | IQ Hedge vs. ProShares Hedge Replication | IQ Hedge vs. First Trust LongShort |
| VanEck Natural vs. Invesco MSCI Global | VanEck Natural vs. WisdomTree Continuous Commodity | VanEck Natural vs. VanEck UraniumNuclear Energy | VanEck Natural vs. SPDR SP Global |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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