Correlation Between Harding Loevner and Icon Natural
Can any of the company-specific risk be diversified away by investing in both Harding Loevner and Icon Natural 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 Icon Natural 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 Icon Natural Resources, you can compare the effects of market volatilities on Harding Loevner and Icon Natural 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 Icon Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harding Loevner and Icon Natural.
Diversification Opportunities for Harding Loevner and Icon Natural
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Harding and Icon is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Harding Loevner International and Icon Natural Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icon Natural Resources 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 Icon Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Icon Natural Resources has no effect on the direction of Harding Loevner i.e., Harding Loevner and Icon Natural go up and down completely randomly.
Pair Corralation between Harding Loevner and Icon Natural
Assuming the 90 days horizon Harding Loevner International is expected to generate 0.73 times more return on investment than Icon Natural. However, Harding Loevner International is 1.38 times less risky than Icon Natural. It trades about 0.04 of its potential returns per unit of risk. Icon Natural Resources is currently generating about 0.03 per unit of risk. If you would invest 2,332 in Harding Loevner International on September 3, 2024 and sell it today you would earn a total of 371.00 from holding Harding Loevner International or generate 15.91% 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. Icon Natural Resources
Performance |
| Timeline |
| Harding Loevner Inte |
| Icon Natural Resources |
Harding Loevner and Icon Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harding Loevner and Icon Natural
The main advantage of trading using opposite Harding Loevner and Icon Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harding Loevner position performs unexpectedly, Icon Natural 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 Icon Natural will offset losses from the drop in Icon Natural's long position.| Harding Loevner vs. Qs Large Cap | Harding Loevner vs. William Blair Large | Harding Loevner vs. T Rowe Price | Harding Loevner vs. Old Westbury Large |
| Icon Natural vs. Icon Financial Fund | Icon Natural vs. Dreyfus Natural Resources | Icon Natural vs. Icon Natural Resources | Icon Natural vs. Icon Information Technology |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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