Correlation Between IndexIQ and PIMCO RAFI
Can any of the company-specific risk be diversified away by investing in both IndexIQ and PIMCO RAFI 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 IndexIQ and PIMCO RAFI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IndexIQ and PIMCO RAFI Dynamic, you can compare the effects of market volatilities on IndexIQ and PIMCO RAFI 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 IndexIQ with a short position of PIMCO RAFI. Check out your portfolio center. Please also check ongoing floating volatility patterns of IndexIQ and PIMCO RAFI.
Diversification Opportunities for IndexIQ and PIMCO RAFI
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IndexIQ and PIMCO is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding IndexIQ and PIMCO RAFI Dynamic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PIMCO RAFI Dynamic and IndexIQ 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 IndexIQ are associated (or correlated) with PIMCO RAFI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PIMCO RAFI Dynamic has no effect on the direction of IndexIQ i.e., IndexIQ and PIMCO RAFI go up and down completely randomly.
Pair Corralation between IndexIQ and PIMCO RAFI
If you would invest 2,914 in PIMCO RAFI Dynamic on February 18, 2024 and sell it today you would earn a total of 196.00 from holding PIMCO RAFI Dynamic or generate 6.73% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
IndexIQ vs. PIMCO RAFI Dynamic
Performance |
Timeline |
IndexIQ |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
PIMCO RAFI Dynamic |
IndexIQ and PIMCO RAFI Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with IndexIQ and PIMCO RAFI
The main advantage of trading using opposite IndexIQ and PIMCO RAFI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IndexIQ position performs unexpectedly, PIMCO RAFI 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 PIMCO RAFI will offset losses from the drop in PIMCO RAFI's long position.IndexIQ vs. First Trust Senior | IndexIQ vs. First Trust Low | IndexIQ vs. First Trust Enhanced | IndexIQ vs. First Trust TCW |
PIMCO RAFI vs. ProShares MSCI Emerging | PIMCO RAFI vs. ProShares MSCI Europe | PIMCO RAFI vs. ProShares Russell 2000 | PIMCO RAFI vs. ProShares SP MidCap |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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