Correlation Between Harding Loevner and Highland Floating
Can any of the company-specific risk be diversified away by investing in both Harding Loevner and Highland Floating 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 Highland Floating 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 Highland Floating Rate, you can compare the effects of market volatilities on Harding Loevner and Highland Floating 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 Highland Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harding Loevner and Highland Floating.
Diversification Opportunities for Harding Loevner and Highland Floating
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Harding and Highland is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Harding Loevner International and Highland Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highland Floating Rate 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 Highland Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highland Floating Rate has no effect on the direction of Harding Loevner i.e., Harding Loevner and Highland Floating go up and down completely randomly.
Pair Corralation between Harding Loevner and Highland Floating
Assuming the 90 days horizon Harding Loevner is expected to generate 1.1 times less return on investment than Highland Floating. In addition to that, Harding Loevner is 1.45 times more volatile than Highland Floating Rate. It trades about 0.04 of its total potential returns per unit of risk. Highland Floating Rate is currently generating about 0.06 per unit of volatility. If you would invest 696.00 in Highland Floating Rate on August 30, 2024 and sell it today you would earn a total of 128.00 from holding Highland Floating Rate or generate 18.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harding Loevner International vs. Highland Floating Rate
Performance |
| Timeline |
| Harding Loevner Inte |
| Highland Floating Rate |
Harding Loevner and Highland Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harding Loevner and Highland Floating
The main advantage of trading using opposite Harding Loevner and Highland Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harding Loevner position performs unexpectedly, Highland Floating 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 Highland Floating will offset losses from the drop in Highland Floating'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 |
| Highland Floating vs. Health Care Fund | Highland Floating vs. Prudential Health Sciences | Highland Floating vs. Hartford Healthcare Hls | Highland Floating vs. Alger Health Sciences |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |