Nasdaq Debuts Correlation-Focused Indexes

November 23, 2010


Nasdaq OMX Group, one of the most widely watched index providers globally, launched five indexes that track correlation between individual stocks and ETFs in a way it says can help investors capture returns even when the market is down.

The Nasdaq OMX Alpha Indexes measure the relative performance of a single stock or ETF against another single stock or leading ETF, which serves as benchmark, allowing investors to adjust their portfolios to reflect that focused performance.

The company explained the strategy by saying that “if the price of a stock declines less than a specific ETF, the Nasdaq OMX Alpha Index tracking the specific relationship between the two will increase.”

“With Nasdaq OMX Alpha Indexes, you’re trading correlation—moreover, correlation between some important asset classes like bonds versus stocks, gold versus stocks or emerging market equities versus U.S. equities,” the company said in a press release. “The recent financial crisis tells us how important that can be.”

The five new indexes focus on various correlations:

  • The Nasdaq OMX Alpha AAPL vs. SPY Index (Nasdaq: AVSPY) tracks the performance of Apple stocks relative to the SPDR S&P 500 ETF.


  • The Nasdaq OMX Alpha GLD vs. SPY Index (Nasdaq: GVSPY) tracks the performance of the world’s largest gold ETF, the SPDR Gold Trust, against the SPDR S&P 500 ETF.


  • The Nasdaq OMX Alpha TLT vs. SPY Index (Nasdaq: TVSPY) measures the relative performance between Treasury notes and the SPDR S&P 500 ETF.


  • The Nasdaq OMX Alpha C vs. XLF Index (Nasdaq: CVXLF) tracks Citigroup’s performance relative to the Financial Select Sector SPDR Fund.


  • The Nasdaq OMX Alpha EEM vs. SPY Index (Nasdaq: EVSPY) zooms in on the emerging markets vs. developed markets story by measuring the performance of the world’s largest emerging markets fund, the iShares MSCI Emerging Markets ETF, relative to the SPDR S&P 500 ETF.


The indexes began real-time calculation on Oct. 11.


Lean why bond ETFs are an essential part of a diversified portfolio with our bond ETF channel.

Learn how currency-hedged ETFs can reduce the currency risk in your portfolio.


Investors took profits on U.S. equity ETFs on Friday, Nov. 20.

Top three issuers saw net inflows in their products on Monday, Nov. 23.


By Dave Nadig

With the SEC looking to regulate liquidity, should bond ETF investors worry?

By Matt Hougan’s conference offered several actionable ideas for investors.

By Dave Nadig

The exchange just proposed the latest rule to reinvent history on bad ETF trades.

By Matt Hougan

Best deal in the history of finance gets better.


By Nicholas Kalivas

The case for low-volatility, currency-hedged exposure in Europe.

By Nick Stonestreet

ETF firm builds out its business.

By Nicholas Kalivas

A sector-momentum strategy may be just what your portfolio needs in the current market environment.