Correlation Between Martin Currie and Tema ETF

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

Diversification Opportunities for Martin Currie and Tema ETF

0.33
  Correlation Coefficient

Weak diversification

The 3 months correlation between Martin and Tema is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Martin Currie Sustainable and Tema ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tema 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 Tema ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tema ETF Trust has no effect on the direction of Martin Currie i.e., Martin Currie and Tema ETF go up and down completely randomly.

Pair Corralation between Martin Currie and Tema ETF

Given the investment horizon of 90 days Martin Currie Sustainable is expected to generate 0.68 times more return on investment than Tema ETF. However, Martin Currie Sustainable is 1.48 times less risky than Tema ETF. It trades about 0.44 of its potential returns per unit of risk. Tema ETF Trust is currently generating about 0.18 per unit of risk. If you would invest  1,303  in Martin Currie Sustainable on November 3, 2024 and sell it today you would earn a total of  116.00  from holding Martin Currie Sustainable or generate 8.9% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Martin Currie Sustainable  vs.  Tema ETF Trust

 Performance 
       Timeline  
Martin Currie Sustainable 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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 latest stock price tumult, may contribute to shorter-term losses for the shareholders.
Tema ETF Trust 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Tema ETF Trust are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical indicators, Tema ETF is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Martin Currie and Tema ETF Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Martin Currie and Tema ETF

The main advantage of trading using opposite Martin Currie and Tema ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Martin Currie position performs unexpectedly, Tema 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 Tema ETF will offset losses from the drop in Tema ETF's long position.
The idea behind Martin Currie Sustainable and Tema 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.

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