Correlation Between Harding Loevner and Ab Small
Can any of the company-specific risk be diversified away by investing in both Harding Loevner and Ab Small 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 Small 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 Ab Small Cap, you can compare the effects of market volatilities on Harding Loevner and Ab Small 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 Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harding Loevner and Ab Small.
Diversification Opportunities for Harding Loevner and Ab Small
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Harding and QUAKX is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Harding Loevner International and Ab Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Small Cap 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 Ab Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Small Cap has no effect on the direction of Harding Loevner i.e., Harding Loevner and Ab Small go up and down completely randomly.
Pair Corralation between Harding Loevner and Ab Small
Assuming the 90 days horizon Harding Loevner International is expected to generate 0.58 times more return on investment than Ab Small. However, Harding Loevner International is 1.72 times less risky than Ab Small. It trades about 0.02 of its potential returns per unit of risk. Ab Small Cap is currently generating about 0.01 per unit of risk. If you would invest 1,219 in Harding Loevner International on January 11, 2025 and sell it today you would earn a total of 80.00 from holding Harding Loevner International or generate 6.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harding Loevner International vs. Ab Small Cap
Performance |
| Timeline |
| Harding Loevner Inte |
| Ab Small Cap |
Harding Loevner and Ab Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harding Loevner and Ab Small
The main advantage of trading using opposite Harding Loevner and Ab Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harding Loevner position performs unexpectedly, Ab Small 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 Small will offset losses from the drop in Ab Small's long position.| Harding Loevner vs. Nicholas Ii Inc | Harding Loevner vs. Harding Loevner Emerging | Harding Loevner vs. Touchstone Sands Capital | Harding Loevner vs. Harding Loevner Global |
| Ab Small vs. Ab Large Cap | Ab Small vs. Blackrock Mid Cap | Ab Small vs. Ab Sustainable Global | Ab Small vs. Ab Discovery Growth |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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