Correlation Between The Hartford and Harding Loevner
Can any of the company-specific risk be diversified away by investing in both The Hartford 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 The Hartford and Harding Loevner into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Hartford Inflation and Harding Loevner Frontier, you can compare the effects of market volatilities on The Hartford 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 The Hartford with a short position of Harding Loevner. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Hartford and Harding Loevner.
Diversification Opportunities for The Hartford and Harding Loevner
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between The and Harding is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Inflation 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 The Hartford 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 The Hartford Inflation 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 The Hartford i.e., The Hartford and Harding Loevner go up and down completely randomly.
Pair Corralation between The Hartford and Harding Loevner
Assuming the 90 days horizon The Hartford is expected to generate 2.32 times less return on investment than Harding Loevner. But when comparing it to its historical volatility, The Hartford Inflation is 1.74 times less risky than Harding Loevner. It trades about 0.05 of its potential returns per unit of risk. Harding Loevner Frontier is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 703.00 in Harding Loevner Frontier on September 2, 2024 and sell it today you would earn a total of 103.00 from holding Harding Loevner Frontier or generate 14.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Hartford Inflation vs. Harding Loevner Frontier
Performance |
| Timeline |
| The Hartford Inflation |
| Harding Loevner Frontier |
The Hartford and Harding Loevner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with The Hartford and Harding Loevner
The main advantage of trading using opposite The Hartford and Harding Loevner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Hartford 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.| The Hartford vs. Hartford Growth Opportunities | The Hartford vs. The Hartford Growth | The Hartford vs. Hartford Global Impact | The Hartford vs. Hartford Global Impact |
| Harding Loevner vs. Chartwell Short Duration | Harding Loevner vs. Quantitative Longshort Equity | Harding Loevner vs. Ab Select Longshort | Harding Loevner vs. Federated Ultrashort Bond |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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