Correlation Between VanEck Short and IndexIQ

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Can any of the company-specific risk be diversified away by investing in both VanEck Short 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 VanEck Short and IndexIQ into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VanEck Short Muni and IndexIQ, you can compare the effects of market volatilities on VanEck Short 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 VanEck Short with a short position of IndexIQ. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Short and IndexIQ.

Diversification Opportunities for VanEck Short and IndexIQ

0.01
  Correlation Coefficient

Significant diversification

The 3 months correlation between VanEck and IndexIQ is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Short Muni and IndexIQ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IndexIQ and VanEck Short 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 VanEck Short Muni 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 VanEck Short i.e., VanEck Short and IndexIQ go up and down completely randomly.

Pair Corralation between VanEck Short and IndexIQ

If you would invest (100.00) in IndexIQ on December 30, 2023 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 Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

VanEck Short Muni  vs.  IndexIQ

 Performance 
       Timeline  
VanEck Short Muni 

Risk-Adjusted Performance

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Very Weak
Over the last 90 days VanEck Short Muni has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong primary indicators, VanEck Short is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
IndexIQ 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days IndexIQ has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable essential indicators, IndexIQ is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

VanEck Short and IndexIQ Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with VanEck Short and IndexIQ

The main advantage of trading using opposite VanEck Short and IndexIQ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Short 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 VanEck Short Muni 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.

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