Correlation Between Harding Loevner and Ab Global
Can any of the company-specific risk be diversified away by investing in both Harding Loevner and Ab Global 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 Ab Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Harding Loevner Global and Ab Global Bond, you can compare the effects of market volatilities on Harding Loevner and Ab Global 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 Ab Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harding Loevner and Ab Global.
Diversification Opportunities for Harding Loevner and Ab Global
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Harding and ANAZX is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Harding Loevner Global and Ab Global Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Global Bond 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 Global are associated (or correlated) with Ab Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Global Bond has no effect on the direction of Harding Loevner i.e., Harding Loevner and Ab Global go up and down completely randomly.
Pair Corralation between Harding Loevner and Ab Global
Assuming the 90 days horizon Harding Loevner Global is expected to under-perform the Ab Global. In addition to that, Harding Loevner is 5.02 times more volatile than Ab Global Bond. It trades about -0.22 of its total potential returns per unit of risk. Ab Global Bond is currently generating about -0.57 per unit of volatility. If you would invest 696.00 in Ab Global Bond on October 12, 2024 and sell it today you would lose (13.00) from holding Ab Global Bond or give up 1.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harding Loevner Global vs. Ab Global Bond
Performance |
| Timeline |
| Harding Loevner Global |
| Ab Global Bond |
Harding Loevner and Ab Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harding Loevner and Ab Global
The main advantage of trading using opposite Harding Loevner and Ab Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harding Loevner position performs unexpectedly, Ab Global 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 Ab Global will offset losses from the drop in Ab Global's long position.| Harding Loevner vs. Harding Loevner Funds | Harding Loevner vs. Harding Loevner Emerging | Harding Loevner vs. Harding Loevner Frontier | Harding Loevner vs. Harding Loevner International |
| Ab Global vs. Financial Industries Fund | Ab Global vs. Blackrock Financial Institutions | Ab Global vs. John Hancock Financial | Ab Global vs. Angel Oak Financial |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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