Correlation Between Martin Currie and AdvisorShares Vice

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

Diversification Opportunities for Martin Currie and AdvisorShares Vice

-0.57

Correlation Coefficient

Martin Currie  AdvisorShares Vice

Excellent diversification

The 3 months correlation between Martin and AdvisorShares is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Martin Currie Sustainable and AdvisorShares Vice ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AdvisorShares Vice ETF 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 AdvisorShares Vice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AdvisorShares Vice ETF has no effect on the direction of Martin Currie i.e., Martin Currie and AdvisorShares Vice go up and down completely randomly.

Pair Corralation between Martin Currie and AdvisorShares Vice

Given the investment horizon of 90 days Martin Currie Sustainable is expected to under-perform the AdvisorShares Vice. In addition to that, Martin Currie is 1.73 times more volatile than AdvisorShares Vice ETF. It trades about -0.08 of its total potential returns per unit of risk. AdvisorShares Vice ETF is currently generating about 0.25 per unit of volatility. If you would invest  3,040  in AdvisorShares Vice ETF on September 5, 2024 and sell it today you would earn a total of  332.00  from holding AdvisorShares Vice ETF or generate 10.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Martin Currie Sustainable  vs.  AdvisorShares Vice ETF

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.

AdvisorShares Vice ETF

Risk-Adjusted Performance

0 of 100

Solid

Over the last 90 days AdvisorShares Vice ETF has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather weak fundamental indicators, AdvisorShares Vice may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Martin Currie and AdvisorShares Vice

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

The idea behind Martin Currie Sustainable and AdvisorShares Vice ETF 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.