Correlation Between Highland Longshort and Harding Loevner
Can any of the company-specific risk be diversified away by investing in both Highland Longshort 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 Highland Longshort and Harding Loevner into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Highland Longshort Healthcare and Harding Loevner Frontier, you can compare the effects of market volatilities on Highland Longshort 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 Highland Longshort with a short position of Harding Loevner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highland Longshort and Harding Loevner.
Diversification Opportunities for Highland Longshort and Harding Loevner
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Highland and Harding is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Highland Longshort Healthcare 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 Highland Longshort 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 Highland Longshort Healthcare 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 Highland Longshort i.e., Highland Longshort and Harding Loevner go up and down completely randomly.
Pair Corralation between Highland Longshort and Harding Loevner
Assuming the 90 days horizon Highland Longshort Healthcare is expected to generate 0.43 times more return on investment than Harding Loevner. However, Highland Longshort Healthcare is 2.32 times less risky than Harding Loevner. It trades about 0.24 of its potential returns per unit of risk. Harding Loevner Frontier is currently generating about -0.12 per unit of risk. If you would invest 1,645 in Highland Longshort Healthcare on November 4, 2024 and sell it today you would earn a total of 17.00 from holding Highland Longshort Healthcare or generate 1.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Highland Longshort Healthcare vs. Harding Loevner Frontier
Performance |
| Timeline |
| Highland Longshort |
| Harding Loevner Frontier |
Highland Longshort and Harding Loevner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highland Longshort and Harding Loevner
The main advantage of trading using opposite Highland Longshort and Harding Loevner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highland Longshort 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.| Highland Longshort vs. Tiaa Cref Lifecycle Retirement | Highland Longshort vs. Voya Retirement Servative | Highland Longshort vs. Wilmington Trust Retirement | Highland Longshort vs. Putnman Retirement Ready |
| Harding Loevner vs. Global Diversified Income | Harding Loevner vs. Jpmorgan Diversified Fund | Harding Loevner vs. Diversified Income Fund | Harding Loevner vs. Allianzgi Diversified Income |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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