Correlation Between Dow Jones and Martin Currie
Can any of the company-specific risk be diversified away by investing in both Dow Jones 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 Dow Jones and Martin Currie into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dow Jones Industrial and Martin Currie Emerging, you can compare the effects of market volatilities on Dow Jones 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 Dow Jones with a short position of Martin Currie. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Martin Currie.
Diversification Opportunities for Dow Jones and Martin Currie
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dow and Martin is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Martin Currie Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Martin Currie Emerging and Dow Jones 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 Dow Jones Industrial 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 Emerging has no effect on the direction of Dow Jones i.e., Dow Jones and Martin Currie go up and down completely randomly.
Pair Corralation between Dow Jones and Martin Currie
Assuming the 90 days trading horizon Dow Jones is expected to generate 1.68 times less return on investment than Martin Currie. But when comparing it to its historical volatility, Dow Jones Industrial is 1.23 times less risky than Martin Currie. It trades about 0.05 of its potential returns per unit of risk. Martin Currie Emerging is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,250 in Martin Currie Emerging on September 13, 2024 and sell it today you would earn a total of 12.00 from holding Martin Currie Emerging or generate 0.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Dow Jones Industrial vs. Martin Currie Emerging
Performance |
| Timeline |
Dow Jones and Martin Currie Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Martin Currie Emerging
Pair trading matchups for Martin Currie
Pair Trading with Dow Jones and Martin Currie
The main advantage of trading using opposite Dow Jones and Martin Currie positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones 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.| Dow Jones vs. ChampionX | Dow Jones vs. Highway Holdings Limited | Dow Jones vs. Westinghouse Air Brake | Dow Jones vs. Cementos Pacasmayo SAA |
| Martin Currie vs. Clearbridge Aggressive Growth | Martin Currie vs. Clearbridge Small Cap | Martin Currie vs. Qs International Equity | Martin Currie vs. Clearbridge Appreciation Fund |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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