Correlation Between IREIT MarketVector and IndexIQ

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

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

Diversification Opportunities for IREIT MarketVector and IndexIQ

0.0

Correlation Coefficient

IREIT MarketVector  IndexIQ

Pay attention - limited upside

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

Pair Corralation between IREIT MarketVector and IndexIQ

If you would invest  1,975  in iREIT MarketVector on December 19, 2024 and sell it today you would earn a total of  9.00  from holding iREIT MarketVector or generate 0.46% return on investment over 90 days.

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

iREIT MarketVector  vs.  IndexIQ

iREIT MarketVector

Risk-Adjusted Performance

Very Weak

Over the last 90 days iREIT MarketVector has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, IREIT MarketVector is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

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. Even with relatively invariable basic indicators, IndexIQ is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with IREIT MarketVector and IndexIQ

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

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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.