Correlation Between Xtrackers MSCI and IndexIQ
Can any of the company-specific risk be diversified away by investing in both Xtrackers MSCI 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 Xtrackers MSCI and IndexIQ into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers MSCI USA and IndexIQ, you can compare the effects of market volatilities on Xtrackers MSCI 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 Xtrackers MSCI with a short position of IndexIQ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers MSCI and IndexIQ.
Diversification Opportunities for Xtrackers MSCI and IndexIQ
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Xtrackers and IndexIQ is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers MSCI USA and IndexIQ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IndexIQ and Xtrackers MSCI 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 Xtrackers MSCI USA 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 Xtrackers MSCI i.e., Xtrackers MSCI and IndexIQ go up and down completely randomly.
Pair Corralation between Xtrackers MSCI and IndexIQ
If you would invest 5,449 in Xtrackers MSCI USA on October 21, 2024 and sell it today you would earn a total of 74.00 from holding Xtrackers MSCI USA or generate 1.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 5.26% |
| Values | Daily Returns |
Xtrackers MSCI USA vs. IndexIQ
Performance |
| Timeline |
| Xtrackers MSCI USA |
| IndexIQ |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Xtrackers MSCI and IndexIQ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers MSCI and IndexIQ
The main advantage of trading using opposite Xtrackers MSCI and IndexIQ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers MSCI 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.| Xtrackers MSCI vs. iShares ESG MSCI | Xtrackers MSCI vs. Xtrackers SP 500 | Xtrackers MSCI vs. iShares MSCI USA | Xtrackers MSCI vs. Vanguard ESG International |
| IndexIQ vs. iShares MSCI EAFE | IndexIQ vs. Schwab Fundamental International | IndexIQ vs. Vanguard International High | IndexIQ vs. iShares International Select |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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