Correlation Between Harding Loevner and Templeton Growth
Can any of the company-specific risk be diversified away by investing in both Harding Loevner and Templeton Growth 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 Templeton Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Harding Loevner Funds and Templeton Growth Fund, you can compare the effects of market volatilities on Harding Loevner and Templeton Growth 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 Templeton Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harding Loevner and Templeton Growth.
Diversification Opportunities for Harding Loevner and Templeton Growth
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Harding and Templeton is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Harding Loevner Funds and Templeton Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Templeton Growth 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 Funds are associated (or correlated) with Templeton Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Templeton Growth has no effect on the direction of Harding Loevner i.e., Harding Loevner and Templeton Growth go up and down completely randomly.
Pair Corralation between Harding Loevner and Templeton Growth
Assuming the 90 days horizon Harding Loevner Funds is expected to under-perform the Templeton Growth. But the mutual fund apears to be less risky and, when comparing its historical volatility, Harding Loevner Funds is 1.0 times less risky than Templeton Growth. The mutual fund trades about -0.18 of its potential returns per unit of risk. The Templeton Growth Fund is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 2,731 in Templeton Growth Fund on September 4, 2024 and sell it today you would earn a total of 81.00 from holding Templeton Growth Fund or generate 2.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harding Loevner Funds vs. Templeton Growth Fund
Performance |
| Timeline |
| Harding Loevner Funds |
| Templeton Growth |
Harding Loevner and Templeton Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harding Loevner and Templeton Growth
The main advantage of trading using opposite Harding Loevner and Templeton Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harding Loevner position performs unexpectedly, Templeton Growth 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 Templeton Growth will offset losses from the drop in Templeton Growth's long position.| Harding Loevner vs. Rbb Fund | Harding Loevner vs. Volumetric Fund Volumetric | Harding Loevner vs. T Rowe Price | Harding Loevner vs. Fm Investments Large |
| Templeton Growth vs. Prudential Financial Services | Templeton Growth vs. Financials Ultrasector Profund | Templeton Growth vs. Davis Financial Fund | Templeton Growth vs. Fidelity Advisor Financial |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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