Correlation Between IndexIQ Active and American Century

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

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

Diversification Opportunities for IndexIQ Active and American Century

0.0

Correlation Coefficient

IndexIQ Active  American Century

Pay attention - limited upside

The 3 months correlation between IndexIQ and American is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding IndexIQ Active ETF and American Century Sustainable in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Century Sus and IndexIQ Active 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 Active ETF are associated (or correlated) with American Century. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Century Sus has no effect on the direction of IndexIQ Active i.e., IndexIQ Active and American Century go up and down completely randomly.

Pair Corralation between IndexIQ Active and American Century

If you would invest  2,071  in IndexIQ Active ETF on December 30, 2024 and sell it today you would earn a total of  48.00  from holding IndexIQ Active ETF or generate 2.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

IndexIQ Active ETF  vs.  American Century Sustainable

IndexIQ Active ETF

Risk-Adjusted Performance

Good

Over the last 90 days IndexIQ Active ETF has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, IndexIQ Active is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

American Century Sus

Risk-Adjusted Performance

Very Weak

Over the last 90 days American Century Sustainable has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, American Century is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with IndexIQ Active and American Century

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

The idea behind IndexIQ Active ETF and American Century Sustainable 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.