Correlation Between Nasdaq and Martin Currie
Can any of the company-specific risk be diversified away by investing in both Nasdaq 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 Nasdaq and Martin Currie into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nasdaq Inc and Martin Currie Emerging, you can compare the effects of market volatilities on Nasdaq 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 Nasdaq with a short position of Martin Currie. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq and Martin Currie.
Diversification Opportunities for Nasdaq and Martin Currie
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nasdaq and Martin is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc 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 Nasdaq 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 Nasdaq Inc 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 Nasdaq i.e., Nasdaq and Martin Currie go up and down completely randomly.
Pair Corralation between Nasdaq and Martin Currie
Given the investment horizon of 90 days Nasdaq Inc is expected to generate 1.5 times more return on investment than Martin Currie. However, Nasdaq is 1.5 times more volatile than Martin Currie Emerging. It trades about 0.13 of its potential returns per unit of risk. Martin Currie Emerging is currently generating about 0.07 per unit of risk. If you would invest 7,890 in Nasdaq Inc on September 13, 2024 and sell it today you would earn a total of 217.00 from holding Nasdaq Inc or generate 2.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nasdaq Inc vs. Martin Currie Emerging
Performance |
| Timeline |
| Nasdaq Inc |
| Martin Currie Emerging |
Nasdaq and Martin Currie Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq and Martin Currie
The main advantage of trading using opposite Nasdaq and Martin Currie positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq 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.The idea behind Nasdaq Inc and Martin Currie Emerging 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.| 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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