Correlation Between Franklin and Harding Loevner
Can any of the company-specific risk be diversified away by investing in both Franklin 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 Franklin and Harding Loevner into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Government Money and Harding Loevner Funds, you can compare the effects of market volatilities on Franklin 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 Franklin with a short position of Harding Loevner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin and Harding Loevner.
Diversification Opportunities for Franklin and Harding Loevner
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Franklin and Harding is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Government Money 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 Franklin 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 Franklin Government Money 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 Franklin i.e., Franklin and Harding Loevner go up and down completely randomly.
Pair Corralation between Franklin and Harding Loevner
If you would invest 100.00 in Franklin Government Money on September 2, 2024 and sell it today you would earn a total of 0.00 from holding Franklin Government Money or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Government Money vs. Harding Loevner Funds
Performance |
| Timeline |
| Franklin Government Money |
| Harding Loevner Funds |
Franklin and Harding Loevner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin and Harding Loevner
The main advantage of trading using opposite Franklin and Harding Loevner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin 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.| Franklin vs. Vanguard Total Stock | Franklin vs. Vanguard 500 Index | Franklin vs. Vanguard Total Stock | Franklin vs. Vanguard Total Stock |
| Harding Loevner vs. Aig Government Money | Harding Loevner vs. T Rowe Price | Harding Loevner vs. Franklin Government Money | Harding Loevner vs. Meeder Funds |
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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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