Correlation Between Global X and Martin Currie

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

By analyzing existing cross correlation between Global X Disruptive and Martin Currie Sustainable, you can compare the effects of market volatilities on Global X and Martin Currie 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 Global X with a short position of Martin Currie. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and Martin Currie.

Diversification Opportunities for Global X and Martin Currie

0.41

Correlation Coefficient

Global X  Martin Currie

Very weak diversification

The 3 months correlation between Global and Martin is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Global X Disruptive and Martin Currie Sustainable in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Martin Currie Sustainable and Global X 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 Global X Disruptive are associated (or correlated) with Martin Currie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Martin Currie Sustainable has no effect on the direction of Global X i.e., Global X and Martin Currie go up and down completely randomly.

Pair Corralation between Global X and Martin Currie

Given the investment horizon of 90 days Global X Disruptive is expected to generate 1.09 times more return on investment than Martin Currie. However, Global X is 1.09 times more volatile than Martin Currie Sustainable. It trades about 0.1 of its potential returns per unit of risk. Martin Currie Sustainable is currently generating about 0.04 per unit of risk. If you would invest  1,431  in Global X Disruptive on December 28, 2024 and sell it today you would earn a total of  117.00  from holding Global X Disruptive or generate 8.18% return on investment over 90 days.

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

Global X Disruptive  vs.  Martin Currie Sustainable

Global X Disruptive

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Global X Disruptive are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Global X may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Martin Currie Sustainable

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Martin Currie Sustainable are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Martin Currie is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Global X and Martin Currie

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

The idea behind Global X Disruptive and Martin Currie Sustainable 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.