Correlation Between Martin Currie and WisdomTree Cybersecurity

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

Diversification Opportunities for Martin Currie and WisdomTree Cybersecurity

-0.54

Correlation Coefficient

Martin Currie  WisdomTree Cybersecurity

Excellent diversification

The 3 months correlation between Martin and WisdomTree is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Martin Currie Sustainable and WisdomTree Cybersecurity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Cybersecurity 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 WisdomTree Cybersecurity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Cybersecurity has no effect on the direction of Martin Currie i.e., Martin Currie and WisdomTree Cybersecurity go up and down completely randomly.

Pair Corralation between Martin Currie and WisdomTree Cybersecurity

Given the investment horizon of 90 days Martin Currie Sustainable is expected to under-perform the WisdomTree Cybersecurity. But the etf apears to be less risky and, when comparing its historical volatility, Martin Currie Sustainable is 1.55 times less risky than WisdomTree Cybersecurity. The etf trades about -0.13 of its potential returns per unit of risk. The WisdomTree Cybersecurity is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  2,740  in WisdomTree Cybersecurity on October 7, 2024 and sell it today you would earn a total of  137.00  from holding WisdomTree Cybersecurity or generate 5.0% return on investment over 90 days.

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

Martin Currie Sustainable  vs.  WisdomTree Cybersecurity

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 latest conflicting performance, the Etf's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the fund shareholders.

WisdomTree Cybersecurity

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in WisdomTree Cybersecurity are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak fundamental drivers, WisdomTree Cybersecurity reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Martin Currie and WisdomTree Cybersecurity

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

The idea behind Martin Currie Sustainable and WisdomTree Cybersecurity 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.

Check out your portfolio center.

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.