Correlation Between Martin Currie and Defiance Hotel

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

Diversification Opportunities for Martin Currie and Defiance Hotel

-0.75

Correlation Coefficient

Martin Currie  Defiance Hotel

Pay attention - limited upside

The 3 months correlation between Martin and Defiance is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Martin Currie Sustainable and Defiance Hotel Airline in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Defiance Hotel Airline 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 Defiance Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Defiance Hotel Airline has no effect on the direction of Martin Currie i.e., Martin Currie and Defiance Hotel go up and down completely randomly.

Pair Corralation between Martin Currie and Defiance Hotel

Given the investment horizon of 90 days Martin Currie Sustainable is expected to under-perform the Defiance Hotel. In addition to that, Martin Currie is 1.09 times more volatile than Defiance Hotel Airline. It trades about -0.07 of its total potential returns per unit of risk. Defiance Hotel Airline is currently generating about 0.38 per unit of volatility. If you would invest  2,139  in Defiance Hotel Airline on September 11, 2024 and sell it today you would earn a total of  621.00  from holding Defiance Hotel Airline or generate 29.03% 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.  Defiance Hotel Airline

Martin Currie Sustainable

Risk-Adjusted Performance

0 of 100

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.

Defiance Hotel Airline

Risk-Adjusted Performance

29 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Defiance Hotel Airline are ranked lower than 29 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Defiance Hotel showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Martin Currie and Defiance Hotel

The main advantage of trading using opposite Martin Currie and Defiance Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Martin Currie position performs unexpectedly, Defiance Hotel 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 Defiance Hotel will offset losses from the drop in Defiance Hotel's long position.

The idea behind Martin Currie Sustainable and Defiance Hotel Airline 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.