Correlation Between Dimensional Core and IndexIQ

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

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

Diversification Opportunities for Dimensional Core and IndexIQ

0.0

Correlation Coefficient

Dimensional Core  IndexIQ

Pay attention - limited upside

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

Pair Corralation between Dimensional Core and IndexIQ

If you would invest  3,270  in Dimensional Core Equity on May 7, 2025 and sell it today you would earn a total of  391.00  from holding Dimensional Core Equity or generate 11.96% return on investment over 90 days.

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

Dimensional Core Equity  vs.  IndexIQ

Dimensional Core Equity

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Dimensional Core Equity are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Dimensional Core may actually be approaching a critical reversion point that can send shares even higher in September 2025.

IndexIQ

Risk-Adjusted Performance

Weakest

Over the last 90 days IndexIQ has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, IndexIQ is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Dimensional Core and IndexIQ

The main advantage of trading using opposite Dimensional Core and IndexIQ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dimensional Core 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 Dimensional Core Equity 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 Stocks Directory module to find actively traded stocks across global markets.