Correlation Between Martin Currie and DBX ETF

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

Diversification Opportunities for Martin Currie and DBX ETF

0.24

Correlation Coefficient

Martin Currie  DBX ETF

Modest diversification

The 3 months correlation between Martin and DBX is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Martin Currie Sustainable and DBX ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DBX ETF Trust 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 DBX ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DBX ETF Trust has no effect on the direction of Martin Currie i.e., Martin Currie and DBX ETF go up and down completely randomly.

Pair Corralation between Martin Currie and DBX ETF

Given the investment horizon of 90 days Martin Currie Sustainable is expected to generate 1.22 times more return on investment than DBX ETF. However, Martin Currie is 1.22 times more volatile than DBX ETF Trust. It trades about 0.1 of its potential returns per unit of risk. DBX ETF Trust is currently generating about -0.06 per unit of risk. If you would invest  1,322  in Martin Currie Sustainable on December 20, 2024 and sell it today you would earn a total of  92.00  from holding Martin Currie Sustainable or generate 6.96% return on investment over 90 days.

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

Martin Currie Sustainable  vs.  DBX ETF Trust

Martin Currie Sustainable

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Martin Currie Sustainable are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting basic indicators, Martin Currie may actually be approaching a critical reversion point that can send shares even higher in April 2025.

DBX ETF Trust

Risk-Adjusted Performance

Very Weak

Over the last 90 days DBX ETF Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, DBX ETF is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Martin Currie and DBX ETF

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

The idea behind Martin Currie Sustainable and DBX ETF Trust 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 Global Correlations module to find global opportunities by holding instruments from different markets.