Correlation Between FFHG and IndexIQ

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

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

Diversification Opportunities for FFHG and IndexIQ

0.0

Correlation Coefficient

FFHG  IndexIQ

Pay attention - limited upside

The 3 months correlation between FFHG and IndexIQ is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding FFHG and IndexIQ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IndexIQ and FFHG 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 FFHG 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 FFHG i.e., FFHG and IndexIQ go up and down completely randomly.

Pair Corralation between FFHG and IndexIQ

If you would invest (100.00) in IndexIQ on December 25, 2024 and sell it today you would earn a total of  100.00  from holding IndexIQ or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

FFHG  vs.  IndexIQ

FFHG

Risk-Adjusted Performance

Very Weak

Over the last 90 days FFHG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical indicators, FFHG is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

IndexIQ

Risk-Adjusted Performance

Very Weak

Over the last 90 days IndexIQ has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent primary indicators, IndexIQ is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with FFHG and IndexIQ

The main advantage of trading using opposite FFHG and IndexIQ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FFHG 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.

The idea behind FFHG and IndexIQ 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.

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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.