Correlation Between Exchange Traded and IndexIQ Active

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

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

Diversification Opportunities for Exchange Traded and IndexIQ Active

0.71

Correlation Coefficient

Exchange Traded  IndexIQ Active

Poor diversification

The 3 months correlation between Exchange and IndexIQ is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Exchange Traded Concepts and IndexIQ Active ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IndexIQ Active ETF and Exchange Traded 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 Exchange Traded Concepts are associated (or correlated) with IndexIQ Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IndexIQ Active ETF has no effect on the direction of Exchange Traded i.e., Exchange Traded and IndexIQ Active go up and down completely randomly.

Pair Corralation between Exchange Traded and IndexIQ Active

Given the investment horizon of 90 days Exchange Traded is expected to generate 5.93 times less return on investment than IndexIQ Active. In addition to that, Exchange Traded is 6.05 times more volatile than IndexIQ Active ETF. It trades about 0.0 of its total potential returns per unit of risk. IndexIQ Active ETF is currently generating about 0.11 per unit of volatility. If you would invest  2,441  in IndexIQ Active ETF on July 31, 2025 and sell it today you would earn a total of  197.00  from holding IndexIQ Active ETF or generate 8.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Exchange Traded Concepts  vs.  IndexIQ Active ETF

Exchange Traded Concepts

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Exchange Traded Concepts are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite sluggish basic indicators, Exchange Traded disclosed solid returns over the last few months and may actually be approaching a breakup point.

IndexIQ Active ETF

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in IndexIQ Active ETF are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable fundamental indicators, IndexIQ Active is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Exchange Traded and IndexIQ Active

The main advantage of trading using opposite Exchange Traded and IndexIQ Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exchange Traded position performs unexpectedly, IndexIQ Active 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 Active will offset losses from the drop in IndexIQ Active's long position.

The idea behind Exchange Traded Concepts and IndexIQ Active ETF 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.