Correlation Between Vanguard Emerging and Martin Currie
Can any of the company-specific risk be diversified away by investing in both Vanguard Emerging 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 Vanguard Emerging and Martin Currie into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Emerging Markets and Martin Currie Emerging, you can compare the effects of market volatilities on Vanguard Emerging 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 Vanguard Emerging with a short position of Martin Currie. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Emerging and Martin Currie.
Diversification Opportunities for Vanguard Emerging and Martin Currie
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Vanguard and Martin is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Emerging Markets 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 Vanguard Emerging 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 Vanguard Emerging Markets 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 Vanguard Emerging i.e., Vanguard Emerging and Martin Currie go up and down completely randomly.
Pair Corralation between Vanguard Emerging and Martin Currie
Assuming the 90 days horizon Vanguard Emerging Markets is expected to generate 0.95 times more return on investment than Martin Currie. However, Vanguard Emerging Markets is 1.05 times less risky than Martin Currie. It trades about 0.12 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 3,821 in Vanguard Emerging Markets on September 13, 2024 and sell it today you would earn a total of 59.00 from holding Vanguard Emerging Markets or generate 1.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Vanguard Emerging Markets vs. Martin Currie Emerging
Performance |
| Timeline |
| Vanguard Emerging Markets |
| Martin Currie Emerging |
Vanguard Emerging and Martin Currie Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Emerging and Martin Currie
The main advantage of trading using opposite Vanguard Emerging and Martin Currie positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Emerging 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.| Vanguard Emerging vs. Vanguard Developed Markets | Vanguard Emerging vs. Vanguard Reit Index | Vanguard Emerging vs. Vanguard Small Cap Index | Vanguard Emerging vs. Vanguard European Stock |
| 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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