Correlation Between IndexIQ and Global X

Can any of the company-specific risk be diversified away by investing in both IndexIQ and Global X 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 and Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between IndexIQ and Global X Millennials, you can compare the effects of market volatilities on IndexIQ and Global X 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 with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of IndexIQ and Global X.

Diversification Opportunities for IndexIQ and Global X

0.73

Correlation Coefficient

IndexIQ  Global X

Poor diversification

The 3 months correlation between IndexIQ and Global is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding IndexIQ and Global X Millennials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Millennials and IndexIQ 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 are associated (or correlated) with Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Millennials has no effect on the direction of IndexIQ i.e., IndexIQ and Global X go up and down completely randomly.

Pair Corralation between IndexIQ and Global X

If you would invest  2,576  in IndexIQ on September 24, 2024 and sell it today you would earn a total of  0.00  from holding IndexIQ or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	5.0%
Values	Daily Returns

IndexIQ  vs.  Global X Millennials

IndexIQ

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IndexIQ has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, IndexIQ is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Global X Millennials

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Global X Millennials are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile essential indicators, Global X may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with IndexIQ and Global X

The main advantage of trading using opposite IndexIQ and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IndexIQ position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X's long position.

The idea behind IndexIQ and Global X Millennials pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..