Correlation Between Martin Currie and MicroSectors FANG
Can any of the company-specific risk be diversified away by investing in both Martin Currie and MicroSectors FANG 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 MicroSectors FANG 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 MicroSectors FANG ETN, you can compare the effects of market volatilities on Martin Currie and MicroSectors FANG 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 MicroSectors FANG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Martin Currie and MicroSectors FANG.
Diversification Opportunities for Martin Currie and MicroSectors FANG
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Martin and MicroSectors is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Martin Currie Sustainable and MicroSectors FANG ETN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MicroSectors FANG ETN 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 MicroSectors FANG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MicroSectors FANG ETN has no effect on the direction of Martin Currie i.e., Martin Currie and MicroSectors FANG go up and down completely randomly.
Pair Corralation between Martin Currie and MicroSectors FANG
Given the investment horizon of 90 days Martin Currie Sustainable is expected to under-perform the MicroSectors FANG. But the etf apears to be less risky and, when comparing its historical volatility, Martin Currie Sustainable is 1.34 times less risky than MicroSectors FANG. The etf trades about -0.3 of its potential returns per unit of risk. The MicroSectors FANG ETN is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 5,108 in MicroSectors FANG ETN on August 29, 2024 and sell it today you would earn a total of 295.00 from holding MicroSectors FANG ETN or generate 5.78% 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. MicroSectors FANG ETN
Performance |
| Timeline |
| Martin Currie Sustainable |
| MicroSectors FANG ETN |
Martin Currie and MicroSectors FANG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Martin Currie and MicroSectors FANG
The main advantage of trading using opposite Martin Currie and MicroSectors FANG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Martin Currie position performs unexpectedly, MicroSectors FANG 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 MicroSectors FANG will offset losses from the drop in MicroSectors FANG's long position.| Martin Currie vs. BrandywineGLOBAL Dynamic | Martin Currie vs. First Trust Growth | Martin Currie vs. Invesco NASDAQ Future | Martin Currie vs. Burney Factor Rotation |
| MicroSectors FANG vs. iShares Dividend and | MicroSectors FANG vs. Martin Currie Sustainable | MicroSectors FANG vs. VictoryShares THB Mid | MicroSectors FANG vs. Mast Global Battery |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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