Correlation Between Vanguard Real and IndexIQ

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

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

Diversification Opportunities for Vanguard Real and IndexIQ

0.48

Correlation Coefficient

Vanguard Real  IndexIQ

Very weak diversification

The 3 months correlation between Vanguard and IndexIQ is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Real Estate and IndexIQ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IndexIQ and Vanguard Real 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 Real Estate 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 Real i.e., Vanguard Real and IndexIQ go up and down completely randomly.

Pair Corralation between Vanguard Real and IndexIQ

If you would invest  8,882  in Vanguard Real Estate on October 24, 2024 and sell it today you would earn a total of  251.00  from holding Vanguard Real Estate or generate 2.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	5.56%
Values	Daily Returns

Vanguard Real Estate  vs.  IndexIQ

Vanguard Real Estate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vanguard Real Estate has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Vanguard Real is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

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 latest weak performance, the Etf's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the Exchange Traded Fund stockholders.

Pair Trading with Vanguard Real and IndexIQ

The main advantage of trading using opposite Vanguard Real and IndexIQ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Real 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 Vanguard Real Estate 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.