Correlation Between Invesco SP and IndexIQ
Can any of the company-specific risk be diversified away by investing in both Invesco SP 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 Invesco SP and IndexIQ into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco SP SmallCap and IndexIQ, you can compare the effects of market volatilities on Invesco SP 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 Invesco SP with a short position of IndexIQ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco SP and IndexIQ.
Diversification Opportunities for Invesco SP and IndexIQ
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Invesco and IndexIQ is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Invesco SP SmallCap and IndexIQ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IndexIQ and Invesco SP 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 Invesco SP SmallCap 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 Invesco SP i.e., Invesco SP and IndexIQ go up and down completely randomly.
Pair Corralation between Invesco SP and IndexIQ
Given the investment horizon of 90 days Invesco SP SmallCap is expected to generate 0.14 times more return on investment than IndexIQ. However, Invesco SP SmallCap is 7.08 times less risky than IndexIQ. It trades about 0.07 of its potential returns per unit of risk. IndexIQ is currently generating about -0.07 per unit of risk. If you would invest 3,237 in Invesco SP SmallCap on January 19, 2024 and sell it today you would earn a total of 627.00 from holding Invesco SP SmallCap or generate 19.37% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 63.88% |
Values | Daily Returns |
Invesco SP SmallCap vs. IndexIQ
Performance |
Timeline |
Invesco SP SmallCap |
IndexIQ |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Invesco SP and IndexIQ Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Invesco SP and IndexIQ
The main advantage of trading using opposite Invesco SP and IndexIQ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco SP 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.Invesco SP vs. Vanguard Mid Cap Index | Invesco SP vs. Vanguard Small Cap Value | Invesco SP vs. Vanguard FTSE Emerging | Invesco SP vs. Vanguard Large Cap Index |
IndexIQ vs. Dimensional Targeted Value | IndexIQ vs. Dimensional World ex | IndexIQ vs. Dimensional Small 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
Fundamental Analysis View fundamental data based on most recent published financial statements | |
Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
Equity Valuation Check real value of public entities based on technical and fundamental data |