Correlation Between Dimensional International and IndexIQ

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

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

Diversification Opportunities for Dimensional International and IndexIQ

0.0

Correlation Coefficient

Dimensional International  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 International Core and IndexIQ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IndexIQ and Dimensional International 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 International Core 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 International i.e., Dimensional International and IndexIQ go up and down completely randomly.

Pair Corralation between Dimensional International and IndexIQ

If you would invest  2,882  in Dimensional International Core on May 7, 2025 and sell it today you would earn a total of  232.00  from holding Dimensional International Core or generate 8.05% return on investment over 90 days.

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

Dimensional International Core  vs.  IndexIQ

Dimensional International

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Dimensional International Core are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating forward indicators, Dimensional International 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 International and IndexIQ

The main advantage of trading using opposite Dimensional International and IndexIQ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dimensional International 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 International Core 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.