Correlation Between Artisan Small and Harding Loevner
Can any of the company-specific risk be diversified away by investing in both Artisan 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 Artisan 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 Artisan Small Cap and Harding Loevner Funds, you can compare the effects of market volatilities on Artisan 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 Artisan Small with a short position of Harding Loevner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Artisan Small and Harding Loevner.
Diversification Opportunities for Artisan Small and Harding Loevner
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Artisan and Harding is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Small Cap and Harding Loevner Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harding Loevner Funds and Artisan 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 Artisan Small 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 Funds has no effect on the direction of Artisan Small i.e., Artisan Small and Harding Loevner go up and down completely randomly.
Pair Corralation between Artisan Small and Harding Loevner
Assuming the 90 days horizon Artisan Small Cap is expected to generate 1.67 times more return on investment than Harding Loevner. However, Artisan Small is 1.67 times more volatile than Harding Loevner Funds. It trades about 0.05 of its potential returns per unit of risk. Harding Loevner Funds is currently generating about 0.03 per unit of risk. If you would invest 3,161 in Artisan Small Cap on September 2, 2024 and sell it today you would earn a total of 841.00 from holding Artisan Small Cap or generate 26.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Artisan Small Cap vs. Harding Loevner Funds
Performance |
| Timeline |
| Artisan Small Cap |
| Harding Loevner Funds |
Artisan Small and Harding Loevner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Artisan Small and Harding Loevner
The main advantage of trading using opposite Artisan Small and Harding Loevner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Artisan 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.| Artisan Small vs. Artisan Thematic Fund | Artisan Small vs. Artisan Floating Rate | Artisan Small vs. Artisan Global Unconstrained | Artisan Small vs. Artisan Emerging Markets |
| Harding Loevner vs. Harding Loevner Emerging | Harding Loevner vs. Harding Loevner Institutional | Harding Loevner vs. Harding Loevner Frontier | Harding Loevner vs. Harding Loevner Frontier |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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