Correlation Between Shelton Emerging and Harding Loevner
Can any of the company-specific risk be diversified away by investing in both Shelton Emerging 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 Shelton Emerging and Harding Loevner into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shelton Emerging Markets and Harding Loevner Frontier, you can compare the effects of market volatilities on Shelton Emerging 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 Shelton Emerging with a short position of Harding Loevner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shelton Emerging and Harding Loevner.
Diversification Opportunities for Shelton Emerging and Harding Loevner
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shelton and Harding is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Shelton Emerging Markets 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 Shelton Emerging 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 Shelton Emerging Markets 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 Shelton Emerging i.e., Shelton Emerging and Harding Loevner go up and down completely randomly.
Pair Corralation between Shelton Emerging and Harding Loevner
Assuming the 90 days horizon Shelton Emerging is expected to generate 1.9 times less return on investment than Harding Loevner. In addition to that, Shelton Emerging is 1.75 times more volatile than Harding Loevner Frontier. It trades about 0.02 of its total potential returns per unit of risk. Harding Loevner Frontier is currently generating about 0.06 per unit of volatility. If you would invest 693.00 in Harding Loevner Frontier on August 30, 2024 and sell it today you would earn a total of 117.00 from holding Harding Loevner Frontier or generate 16.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shelton Emerging Markets vs. Harding Loevner Frontier
Performance |
| Timeline |
| Shelton Emerging Markets |
| Harding Loevner Frontier |
Shelton Emerging and Harding Loevner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shelton Emerging and Harding Loevner
The main advantage of trading using opposite Shelton Emerging and Harding Loevner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shelton Emerging 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.| Shelton Emerging vs. Vanguard Emerging Markets | Shelton Emerging vs. Vanguard Emerging Markets | Shelton Emerging vs. HUMANA INC | Shelton Emerging vs. Aquagold International |
| Harding Loevner vs. Vanguard Emerging Markets | Harding Loevner vs. Vanguard Emerging Markets | Harding Loevner vs. HUMANA INC | Harding Loevner vs. Aquagold International |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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