Correlation Between Auer Growth and Harding Loevner
Can any of the company-specific risk be diversified away by investing in both Auer Growth 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 Auer Growth and Harding Loevner into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Auer Growth Fund and Harding Loevner Frontier, you can compare the effects of market volatilities on Auer Growth 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 Auer Growth with a short position of Harding Loevner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auer Growth and Harding Loevner.
Diversification Opportunities for Auer Growth and Harding Loevner
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Auer and Harding is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Auer Growth Fund and Harding Loevner Frontier in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harding Loevner Frontier and Auer Growth 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 Auer Growth Fund 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 Frontier has no effect on the direction of Auer Growth i.e., Auer Growth and Harding Loevner go up and down completely randomly.
Pair Corralation between Auer Growth and Harding Loevner
Assuming the 90 days horizon Auer Growth Fund is expected to generate 2.46 times more return on investment than Harding Loevner. However, Auer Growth is 2.46 times more volatile than Harding Loevner Frontier. It trades about 0.16 of its potential returns per unit of risk. Harding Loevner Frontier is currently generating about -0.25 per unit of risk. If you would invest 1,716 in Auer Growth Fund on August 26, 2024 and sell it today you would earn a total of 62.00 from holding Auer Growth Fund or generate 3.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Auer Growth Fund vs. Harding Loevner Frontier
Performance |
| Timeline |
| Auer Growth Fund |
| Harding Loevner Frontier |
Auer Growth and Harding Loevner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auer Growth and Harding Loevner
The main advantage of trading using opposite Auer Growth and Harding Loevner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auer Growth 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.| Auer Growth vs. Lebenthal Lisanti Small | Auer Growth vs. Hodges Small Cap | Auer Growth vs. Schwartz Value Focused | Auer Growth vs. Oberweis Small Cap Opportunities |
| Harding Loevner vs. Rational Special Situations | Harding Loevner vs. Auer Growth Fund | Harding Loevner vs. Archer Balanced Fund | Harding Loevner vs. Balanced Fund Investor |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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