Correlation Between Harding Loevner and Ssga International
Can any of the company-specific risk be diversified away by investing in both Harding Loevner and Ssga International 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 Harding Loevner and Ssga International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Harding Loevner Emerging and Ssga International Stock, you can compare the effects of market volatilities on Harding Loevner and Ssga International 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 Harding Loevner with a short position of Ssga International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harding Loevner and Ssga International.
Diversification Opportunities for Harding Loevner and Ssga International
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Harding and Ssga is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Harding Loevner Emerging and Ssga International Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ssga International Stock and Harding Loevner 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 Harding Loevner Emerging are associated (or correlated) with Ssga International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ssga International Stock has no effect on the direction of Harding Loevner i.e., Harding Loevner and Ssga International go up and down completely randomly.
Pair Corralation between Harding Loevner and Ssga International
Assuming the 90 days horizon Harding Loevner Emerging is expected to under-perform the Ssga International. In addition to that, Harding Loevner is 1.15 times more volatile than Ssga International Stock. It trades about -0.21 of its total potential returns per unit of risk. Ssga International Stock is currently generating about -0.16 per unit of volatility. If you would invest 1,155 in Ssga International Stock on August 29, 2024 and sell it today you would lose (29.00) from holding Ssga International Stock or give up 2.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harding Loevner Emerging vs. Ssga International Stock
Performance |
| Timeline |
| Harding Loevner Emerging |
| Ssga International Stock |
Harding Loevner and Ssga International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harding Loevner and Ssga International
The main advantage of trading using opposite Harding Loevner and Ssga International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harding Loevner position performs unexpectedly, Ssga International 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 Ssga International will offset losses from the drop in Ssga International's long position.| Harding Loevner vs. Ssga International Stock | Harding Loevner vs. Schwab E Equity | Harding Loevner vs. Driehaus Emerging Markets | Harding Loevner vs. Columbia Emerging Markets |
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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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