Correlation Between Harding Loevner and Old Westbury
Can any of the company-specific risk be diversified away by investing in both Harding Loevner and Old Westbury 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 Old Westbury into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Harding Loevner Chinese and Old Westbury Large, you can compare the effects of market volatilities on Harding Loevner and Old Westbury 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 Old Westbury. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harding Loevner and Old Westbury.
Diversification Opportunities for Harding Loevner and Old Westbury
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Harding and Old is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Harding Loevner Chinese and Old Westbury Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Westbury Large 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 Chinese are associated (or correlated) with Old Westbury. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Old Westbury Large has no effect on the direction of Harding Loevner i.e., Harding Loevner and Old Westbury go up and down completely randomly.
Pair Corralation between Harding Loevner and Old Westbury
Assuming the 90 days horizon Harding Loevner Chinese is expected to under-perform the Old Westbury. In addition to that, Harding Loevner is 1.93 times more volatile than Old Westbury Large. It trades about -0.01 of its total potential returns per unit of risk. Old Westbury Large is currently generating about 0.11 per unit of volatility. If you would invest 1,602 in Old Westbury Large on September 2, 2024 and sell it today you would earn a total of 548.00 from holding Old Westbury Large or generate 34.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harding Loevner Chinese vs. Old Westbury Large
Performance |
| Timeline |
| Harding Loevner Chinese |
| Old Westbury Large |
Harding Loevner and Old Westbury Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harding Loevner and Old Westbury
The main advantage of trading using opposite Harding Loevner and Old Westbury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harding Loevner position performs unexpectedly, Old Westbury 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 Old Westbury will offset losses from the drop in Old Westbury's long position.| Harding Loevner vs. Harding Loevner Funds | Harding Loevner vs. Harding Loevner Emerging | Harding Loevner vs. Harding Loevner Institutional | Harding Loevner vs. Harding Loevner Global |
| Old Westbury vs. Guidemark E Fixed | Old Westbury vs. Artisan High Income | Old Westbury vs. Versatile Bond Portfolio | Old Westbury vs. Ab Global Bond |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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