Correlation Between Harding Loevner and Sterling Capital
Can any of the company-specific risk be diversified away by investing in both Harding Loevner and Sterling Capital 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 Sterling Capital 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 Sterling Capital Total, you can compare the effects of market volatilities on Harding Loevner and Sterling Capital 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 Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harding Loevner and Sterling Capital.
Diversification Opportunities for Harding Loevner and Sterling Capital
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Harding and Sterling is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Harding Loevner International and Sterling Capital Total in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Capital Total 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 Sterling Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sterling Capital Total has no effect on the direction of Harding Loevner i.e., Harding Loevner and Sterling Capital go up and down completely randomly.
Pair Corralation between Harding Loevner and Sterling Capital
Assuming the 90 days horizon Harding Loevner International is expected to generate 2.01 times more return on investment than Sterling Capital. However, Harding Loevner is 2.01 times more volatile than Sterling Capital Total. It trades about 0.04 of its potential returns per unit of risk. Sterling Capital Total is currently generating about 0.04 per unit of risk. If you would invest 2,348 in Harding Loevner International on August 30, 2024 and sell it today you would earn a total of 332.00 from holding Harding Loevner International or generate 14.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harding Loevner International vs. Sterling Capital Total
Performance |
| Timeline |
| Harding Loevner Inte |
| Sterling Capital Total |
Harding Loevner and Sterling Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harding Loevner and Sterling Capital
The main advantage of trading using opposite Harding Loevner and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harding Loevner position performs unexpectedly, Sterling Capital 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 Sterling Capital will offset losses from the drop in Sterling Capital's long position.| Harding Loevner vs. Lazard International Strategic | Harding Loevner vs. Delaware Value Fund | Harding Loevner vs. American Beacon International | Harding Loevner vs. Hartford Schroders Emerging |
| Sterling Capital vs. Transamerica Funds | Sterling Capital vs. Bbh Intermediate Municipal | Sterling Capital vs. Dws Government Money | Sterling Capital vs. T Rowe Price |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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