Correlation Between Harding Loevner and Aqr Global
Can any of the company-specific risk be diversified away by investing in both Harding Loevner and Aqr 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 Aqr 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 Aqr Global Macro, you can compare the effects of market volatilities on Harding Loevner and Aqr 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 Aqr Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harding Loevner and Aqr Global.
Diversification Opportunities for Harding Loevner and Aqr Global
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Harding and Aqr is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Harding Loevner Global and Aqr Global Macro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Global Macro 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 Aqr Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Global Macro has no effect on the direction of Harding Loevner i.e., Harding Loevner and Aqr Global go up and down completely randomly.
Pair Corralation between Harding Loevner and Aqr Global
Assuming the 90 days horizon Harding Loevner Global is expected to generate 1.19 times more return on investment than Aqr Global. However, Harding Loevner is 1.19 times more volatile than Aqr Global Macro. It trades about 0.22 of its potential returns per unit of risk. Aqr Global Macro is currently generating about 0.11 per unit of risk. If you would invest 3,405 in Harding Loevner Global on October 30, 2024 and sell it today you would earn a total of 101.00 from holding Harding Loevner Global or generate 2.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harding Loevner Global vs. Aqr Global Macro
Performance |
| Timeline |
| Harding Loevner Global |
| Aqr Global Macro |
Harding Loevner and Aqr Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harding Loevner and Aqr Global
The main advantage of trading using opposite Harding Loevner and Aqr Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harding Loevner position performs unexpectedly, Aqr 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 Aqr Global will offset losses from the drop in Aqr Global's long position.| Harding Loevner vs. Intermediate Government Bond | Harding Loevner vs. Dreyfus Government Cash | Harding Loevner vs. Virtus Seix Government | Harding Loevner vs. Ridgeworth Seix Government |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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