Correlation Between Harding Loevner and Absolute Convertible
Can any of the company-specific risk be diversified away by investing in both Harding Loevner and Absolute Convertible 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 Absolute Convertible 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 Absolute Convertible Arbitrage, you can compare the effects of market volatilities on Harding Loevner and Absolute Convertible 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 Absolute Convertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harding Loevner and Absolute Convertible.
Diversification Opportunities for Harding Loevner and Absolute Convertible
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Harding and Absolute is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Harding Loevner Global and Absolute Convertible Arbitrage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Absolute Convertible 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 Absolute Convertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Absolute Convertible has no effect on the direction of Harding Loevner i.e., Harding Loevner and Absolute Convertible go up and down completely randomly.
Pair Corralation between Harding Loevner and Absolute Convertible
Assuming the 90 days horizon Harding Loevner Global is expected to generate 7.44 times more return on investment than Absolute Convertible. However, Harding Loevner is 7.44 times more volatile than Absolute Convertible Arbitrage. It trades about 0.07 of its potential returns per unit of risk. Absolute Convertible Arbitrage is currently generating about 0.14 per unit of risk. If you would invest 2,620 in Harding Loevner Global on October 11, 2024 and sell it today you would earn a total of 795.00 from holding Harding Loevner Global or generate 30.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harding Loevner Global vs. Absolute Convertible Arbitrage
Performance |
| Timeline |
| Harding Loevner Global |
| Absolute Convertible |
Harding Loevner and Absolute Convertible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harding Loevner and Absolute Convertible
The main advantage of trading using opposite Harding Loevner and Absolute Convertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harding Loevner position performs unexpectedly, Absolute Convertible 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 Absolute Convertible will offset losses from the drop in Absolute Convertible's long position.| Harding Loevner vs. Delaware Limited Term Diversified | Harding Loevner vs. Guidepath Conservative Income | Harding Loevner vs. Putnam Diversified Income | Harding Loevner vs. Huber Capital Diversified |
| Absolute Convertible vs. Harding Loevner Global | Absolute Convertible vs. Us Global Investors | Absolute Convertible vs. Morgan Stanley Global | Absolute Convertible vs. Federated Global Allocation |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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