Correlation Between Martin Currie and Fidelity Disruptive

Can any of the company-specific risk be diversified away by investing in both Martin Currie and Fidelity Disruptive 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 Fidelity Disruptive 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 Fidelity Disruptive Communications, you can compare the effects of market volatilities on Martin Currie and Fidelity Disruptive 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 Fidelity Disruptive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Martin Currie and Fidelity Disruptive.

Diversification Opportunities for Martin Currie and Fidelity Disruptive

-0.6

Correlation Coefficient

Martin Currie  Fidelity Disruptive

Excellent diversification

The 3 months correlation between Martin and Fidelity is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Martin Currie Sustainable and Fidelity Disruptive Communicat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity 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 Fidelity Disruptive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Disruptive has no effect on the direction of Martin Currie i.e., Martin Currie and Fidelity Disruptive go up and down completely randomly.

Pair Corralation between Martin Currie and Fidelity Disruptive

Given the investment horizon of 90 days Martin Currie Sustainable is expected to under-perform the Fidelity Disruptive. In addition to that, Martin Currie is 1.31 times more volatile than Fidelity Disruptive Communications. It trades about -0.07 of its total potential returns per unit of risk. Fidelity Disruptive Communications is currently generating about 0.24 per unit of volatility. If you would invest  3,469  in Fidelity Disruptive Communications on September 13, 2024 and sell it today you would earn a total of  496.00  from holding Fidelity Disruptive Communications or generate 14.3% return on investment over 90 days.

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

Martin Currie Sustainable  vs.  Fidelity Disruptive Communicat

Martin Currie Sustainable

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Martin Currie Sustainable has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Martin Currie is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Fidelity Disruptive

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Disruptive Communications are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, Fidelity Disruptive reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Martin Currie and Fidelity Disruptive

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

The idea behind Martin Currie Sustainable and Fidelity Disruptive Communications 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.