Correlation Between Martin Currie and Global X

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

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

Diversification Opportunities for Martin Currie and Global X

0.41

Correlation Coefficient

Martin Currie  Global X

Very weak diversification

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

Pair Corralation between Martin Currie and Global X

Given the investment horizon of 90 days Martin Currie is expected to generate 2.94 times less return on investment than Global X. But when comparing it to its historical volatility, Martin Currie Sustainable is 1.09 times less risky than Global X. It trades about 0.04 of its potential returns per unit of risk. Global X Disruptive is currently generating about 0.1 of returns per unit of risk over similar time horizon. 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

Martin Currie Sustainable  vs.  Global X Disruptive

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.

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.

Pair Trading with Martin Currie and Global X

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

The idea behind Martin Currie Sustainable and Global X Disruptive 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.