Correlation Between Global Stock and Harding Loevner
Can any of the company-specific risk be diversified away by investing in both Global Stock 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 Global Stock and Harding Loevner into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Stock Fund and Harding Loevner International, you can compare the effects of market volatilities on Global Stock 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 Global Stock with a short position of Harding Loevner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Stock and Harding Loevner.
Diversification Opportunities for Global Stock and Harding Loevner
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Global and Harding is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Global Stock Fund 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 Global Stock 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 Global Stock 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 Inte has no effect on the direction of Global Stock i.e., Global Stock and Harding Loevner go up and down completely randomly.
Pair Corralation between Global Stock and Harding Loevner
Assuming the 90 days horizon Global Stock Fund is expected to generate 0.84 times more return on investment than Harding Loevner. However, Global Stock Fund is 1.19 times less risky than Harding Loevner. It trades about 0.13 of its potential returns per unit of risk. Harding Loevner International is currently generating about -0.21 per unit of risk. If you would invest 2,305 in Global Stock Fund on August 30, 2024 and sell it today you would earn a total of 49.00 from holding Global Stock Fund or generate 2.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Stock Fund vs. Harding Loevner International
Performance |
| Timeline |
| Global Stock |
| Harding Loevner Inte |
Global Stock and Harding Loevner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Stock and Harding Loevner
The main advantage of trading using opposite Global Stock and Harding Loevner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Stock 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.| Global Stock vs. Invesco Disciplined Equity | Global Stock vs. T Rowe Price | Global Stock vs. Lord Abbett Developing | Global Stock vs. Aquagold International |
| Harding Loevner vs. Lazard International Strategic | Harding Loevner vs. Delaware Value Fund | Harding Loevner vs. American Beacon International | Harding Loevner vs. Hartford Schroders Emerging |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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