Correlation Between Vanguard Value and IndexIQ
Can any of the company-specific risk be diversified away by investing in both Vanguard Value 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 Vanguard Value and IndexIQ into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Value Index and IndexIQ, you can compare the effects of market volatilities on Vanguard Value 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 Vanguard Value with a short position of IndexIQ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Value and IndexIQ.
Diversification Opportunities for Vanguard Value and IndexIQ
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Vanguard and IndexIQ is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Value Index and IndexIQ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IndexIQ and Vanguard Value 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 Vanguard Value Index 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 Vanguard Value i.e., Vanguard Value and IndexIQ go up and down completely randomly.
Pair Corralation between Vanguard Value and IndexIQ
If you would invest 13,502 in Vanguard Value Index on September 4, 2024 and sell it today you would earn a total of 4,564 from holding Vanguard Value Index or generate 33.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Vanguard Value Index vs. IndexIQ
Performance |
| Timeline |
| Vanguard Value Index |
| IndexIQ |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Vanguard Value and IndexIQ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Value and IndexIQ
The main advantage of trading using opposite Vanguard Value and IndexIQ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Value 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.| Vanguard Value vs. Vanguard Growth Index | Vanguard Value vs. Vanguard Small Cap Value | Vanguard Value vs. Vanguard Mid Cap Value | Vanguard Value vs. Vanguard Small Cap Index |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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