Correlation Between IQ Merger and IndexIQ
Can any of the company-specific risk be diversified away by investing in both IQ Merger 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 IQ Merger and IndexIQ into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IQ Merger Arbitrage and IndexIQ, you can compare the effects of market volatilities on IQ Merger 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 IQ Merger with a short position of IndexIQ. Check out your portfolio center. Please also check ongoing floating volatility patterns of IQ Merger and IndexIQ.
Diversification Opportunities for IQ Merger and IndexIQ
Weak diversification
The 3 months correlation between MNA and IndexIQ is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding IQ Merger Arbitrage and IndexIQ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IndexIQ and IQ Merger 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 IQ Merger Arbitrage 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 IQ Merger i.e., IQ Merger and IndexIQ go up and down completely randomly.
Pair Corralation between IQ Merger and IndexIQ
If you would invest 3,117 in IQ Merger Arbitrage on August 2, 2024 and sell it today you would earn a total of 172.00 from holding IQ Merger Arbitrage or generate 5.52% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 0.81% |
Values | Daily Returns |
IQ Merger Arbitrage vs. IndexIQ
Performance |
Timeline |
IQ Merger Arbitrage |
IndexIQ |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
IQ Merger and IndexIQ Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with IQ Merger and IndexIQ
The main advantage of trading using opposite IQ Merger and IndexIQ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IQ Merger 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.IQ Merger vs. First Trust Managed | IQ Merger vs. Franklin Liberty Systematic | IQ Merger vs. Overlay Shares Foreign | IQ Merger vs. First Trust LongShort |
IndexIQ vs. IQ Hedge Multi Strategy | IndexIQ vs. IQ Merger Arbitrage | IndexIQ vs. WisdomTree Emerging Currency | IndexIQ vs. ProShares Large Cap |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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