Correlation Between IndexIQ and FlexShares Real

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

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

Diversification Opportunities for IndexIQ and FlexShares Real

0.0

Correlation Coefficient

IndexIQ  FlexShares Real

Pay attention - limited upside

The 3 months correlation between IndexIQ and FlexShares is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding IndexIQ and FlexShares Real Assets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FlexShares Real Assets 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 FlexShares Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FlexShares Real Assets has no effect on the direction of IndexIQ i.e., IndexIQ and FlexShares Real go up and down completely randomly.

Pair Corralation between IndexIQ and FlexShares Real

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

IndexIQ  vs.  FlexShares Real Assets

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.

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.

Pair Trading with IndexIQ and FlexShares Real

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

The idea behind IndexIQ and FlexShares Real Assets 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.