Correlation Between Harding Loevner and Small Cap
Can any of the company-specific risk be diversified away by investing in both Harding Loevner and Small Cap 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 Small Cap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Harding Loevner International and Small Cap Value, you can compare the effects of market volatilities on Harding Loevner and Small Cap 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 Small Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harding Loevner and Small Cap.
Diversification Opportunities for Harding Loevner and Small Cap
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Harding and Small is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Harding Loevner International and Small Cap Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Small Cap Value 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 International are associated (or correlated) with Small Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Small Cap Value has no effect on the direction of Harding Loevner i.e., Harding Loevner and Small Cap go up and down completely randomly.
Pair Corralation between Harding Loevner and Small Cap
If you would invest 945.00 in Small Cap Value on September 12, 2024 and sell it today you would earn a total of 245.00 from holding Small Cap Value or generate 25.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Harding Loevner International vs. Small Cap Value
Performance |
| Timeline |
| Harding Loevner Inte |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Small Cap Value |
Harding Loevner and Small Cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harding Loevner and Small Cap
The main advantage of trading using opposite Harding Loevner and Small Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harding Loevner position performs unexpectedly, Small Cap 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 Small Cap will offset losses from the drop in Small Cap's long position.| Harding Loevner vs. Stone Ridge Diversified | Harding Loevner vs. Guggenheim Diversified Income | Harding Loevner vs. Elfun Diversified Fund | Harding Loevner vs. Aqr Diversified Arbitrage |
| Small Cap vs. Cmg Ultra Short | Small Cap vs. Prudential Short Duration | Small Cap vs. Easterly Snow Longshort | Small Cap vs. Aqr Long Short Equity |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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