Correlation Between Harding Loevner and Shelton Emerging
Can any of the company-specific risk be diversified away by investing in both Harding Loevner and Shelton Emerging 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 Shelton Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Harding Loevner Frontier and Shelton Emerging Markets, you can compare the effects of market volatilities on Harding Loevner and Shelton Emerging 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 Shelton Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harding Loevner and Shelton Emerging.
Diversification Opportunities for Harding Loevner and Shelton Emerging
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Harding and Shelton is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Harding Loevner Frontier and Shelton Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shelton Emerging Markets 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 Frontier are associated (or correlated) with Shelton Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shelton Emerging Markets has no effect on the direction of Harding Loevner i.e., Harding Loevner and Shelton Emerging go up and down completely randomly.
Pair Corralation between Harding Loevner and Shelton Emerging
Assuming the 90 days horizon Harding Loevner Frontier is expected to generate 0.58 times more return on investment than Shelton Emerging. However, Harding Loevner Frontier is 1.73 times less risky than Shelton Emerging. It trades about 0.05 of its potential returns per unit of risk. Shelton Emerging Markets is currently generating about -0.01 per unit of risk. If you would invest 781.00 in Harding Loevner Frontier on August 26, 2024 and sell it today you would earn a total of 26.00 from holding Harding Loevner Frontier or generate 3.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harding Loevner Frontier vs. Shelton Emerging Markets
Performance |
| Timeline |
| Harding Loevner Frontier |
| Shelton Emerging Markets |
Harding Loevner and Shelton Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harding Loevner and Shelton Emerging
The main advantage of trading using opposite Harding Loevner and Shelton Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harding Loevner position performs unexpectedly, Shelton Emerging 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 Shelton Emerging will offset losses from the drop in Shelton Emerging's long position.| Harding Loevner vs. Shelton Emerging Markets | Harding Loevner vs. Siit Emerging Markets | Harding Loevner vs. Artisan Emerging Markets | Harding Loevner vs. Dws Emerging Markets |
| Shelton Emerging vs. Wcm Focused Emerging | Shelton Emerging vs. Balter Invenomic Fund | Shelton Emerging vs. Shelton Emerging Markets | Shelton Emerging vs. California Tax Free Income |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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