Correlation Between FlexShares Real and IndexIQ

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

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

Diversification Opportunities for FlexShares Real and IndexIQ

0.0

Correlation Coefficient

FlexShares Real  IndexIQ

Pay attention - limited upside

The 3 months correlation between FlexShares and IndexIQ is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding FlexShares Real Assets and IndexIQ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IndexIQ and FlexShares 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 FlexShares Real Assets 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 FlexShares Real i.e., FlexShares Real and IndexIQ go up and down completely randomly.

Pair Corralation between FlexShares Real and IndexIQ

If you would invest  3,098  in FlexShares Real Assets on April 28, 2025 and sell it today you would earn a total of  196.00  from holding FlexShares Real Assets or generate 6.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

FlexShares Real Assets  vs.  IndexIQ

FlexShares Real Assets

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in FlexShares Real Assets are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, FlexShares Real is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

IndexIQ

Risk-Adjusted Performance

Very Weak

Over the last 90 days IndexIQ has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent primary indicators, IndexIQ is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with FlexShares Real and IndexIQ

The main advantage of trading using opposite FlexShares Real and IndexIQ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FlexShares 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 FlexShares Real Assets 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.