Correlation Between Ancorathelen Small and Harding Loevner

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Can any of the company-specific risk be diversified away by investing in both Ancorathelen Small and Harding Loevner 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 Ancorathelen Small and Harding Loevner into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ancorathelen Small Mid Cap and Harding Loevner International, you can compare the effects of market volatilities on Ancorathelen Small and Harding Loevner 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 Ancorathelen Small with a short position of Harding Loevner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ancorathelen Small and Harding Loevner.

Diversification Opportunities for Ancorathelen Small and Harding Loevner

-0.56
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Ancorathelen and Harding is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Ancorathelen Small Mid Cap and Harding Loevner International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harding Loevner Inte and Ancorathelen Small 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 Ancorathelen Small Mid Cap are associated (or correlated) with Harding Loevner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harding Loevner Inte has no effect on the direction of Ancorathelen Small i.e., Ancorathelen Small and Harding Loevner go up and down completely randomly.

Pair Corralation between Ancorathelen Small and Harding Loevner

Assuming the 90 days horizon Ancorathelen Small Mid Cap is expected to generate 1.41 times more return on investment than Harding Loevner. However, Ancorathelen Small is 1.41 times more volatile than Harding Loevner International. It trades about 0.13 of its potential returns per unit of risk. Harding Loevner International is currently generating about 0.01 per unit of risk. If you would invest  1,894  in Ancorathelen Small Mid Cap on September 1, 2024 and sell it today you would earn a total of  380.00  from holding Ancorathelen Small Mid Cap or generate 20.06% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Ancorathelen Small Mid Cap  vs.  Harding Loevner International

 Performance 
       Timeline  
Ancorathelen Small Mid 

Risk-Adjusted Performance

17 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Ancorathelen Small Mid Cap are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Ancorathelen Small showed solid returns over the last few months and may actually be approaching a breakup point.
Harding Loevner Inte 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Harding Loevner International has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Harding Loevner is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Ancorathelen Small and Harding Loevner Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Ancorathelen Small and Harding Loevner

The main advantage of trading using opposite Ancorathelen Small and Harding Loevner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ancorathelen Small position performs unexpectedly, Harding Loevner 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 Harding Loevner will offset losses from the drop in Harding Loevner's long position.
The idea behind Ancorathelen Small Mid Cap and Harding Loevner International 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.

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