Correlation Between Harding Loevner and Global Stock
Can any of the company-specific risk be diversified away by investing in both Harding Loevner and Global Stock 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 Global Stock 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 Global Stock Fund, you can compare the effects of market volatilities on Harding Loevner and Global Stock 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 Global Stock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harding Loevner and Global Stock.
Diversification Opportunities for Harding Loevner and Global Stock
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between HARDING and Global is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Harding Loevner Global and Global Stock Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Stock 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 Global Stock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Stock has no effect on the direction of Harding Loevner i.e., Harding Loevner and Global Stock go up and down completely randomly.
Pair Corralation between Harding Loevner and Global Stock
Assuming the 90 days horizon Harding Loevner Global is expected to under-perform the Global Stock. In addition to that, Harding Loevner is 1.11 times more volatile than Global Stock Fund. It trades about -0.03 of its total potential returns per unit of risk. Global Stock Fund is currently generating about 0.03 per unit of volatility. If you would invest 2,311 in Global Stock Fund on August 26, 2024 and sell it today you would earn a total of 20.00 from holding Global Stock Fund or generate 0.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harding Loevner Global vs. Global Stock Fund
Performance |
| Timeline |
| Harding Loevner Global |
| Global Stock |
Harding Loevner and Global Stock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harding Loevner and Global Stock
The main advantage of trading using opposite Harding Loevner and Global Stock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harding Loevner position performs unexpectedly, Global Stock 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 Global Stock will offset losses from the drop in Global Stock's long position.| Harding Loevner vs. Harding Loevner International | Harding Loevner vs. Harding Loevner Global | Harding Loevner vs. Harding Loevner International | Harding Loevner vs. Amg Timessquare International |
| Global Stock vs. Dreyfus High Yield | Global Stock vs. Dreyfusthe Boston Pany | Global Stock vs. Dreyfus International Bond | Global Stock vs. Dreyfus International 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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