Correlation Between Leggmason Partners and Harding Loevner
Can any of the company-specific risk be diversified away by investing in both Leggmason Partners and Harding Loevner 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 Leggmason Partners and Harding Loevner into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leggmason Partners Institutional and Harding Loevner International, you can compare the effects of market volatilities on Leggmason Partners and Harding Loevner 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 Leggmason Partners with a short position of Harding Loevner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leggmason Partners and Harding Loevner.
Diversification Opportunities for Leggmason Partners and Harding Loevner
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Leggmason and Harding is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Leggmason Partners Institution and Harding Loevner International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harding Loevner Inte and Leggmason Partners 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 Leggmason Partners Institutional are associated (or correlated) with Harding Loevner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harding Loevner Inte has no effect on the direction of Leggmason Partners i.e., Leggmason Partners and Harding Loevner go up and down completely randomly.
Pair Corralation between Leggmason Partners and Harding Loevner
Assuming the 90 days horizon Leggmason Partners is expected to generate 2.52 times less return on investment than Harding Loevner. But when comparing it to its historical volatility, Leggmason Partners Institutional is 6.83 times less risky than Harding Loevner. It trades about 0.11 of its potential returns per unit of risk. Harding Loevner International is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,275 in Harding Loevner International on September 14, 2024 and sell it today you would earn a total of 92.00 from holding Harding Loevner International or generate 7.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Leggmason Partners Institution vs. Harding Loevner International
Performance |
| Timeline |
| Leggmason Partners |
| Harding Loevner Inte |
Leggmason Partners and Harding Loevner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leggmason Partners and Harding Loevner
The main advantage of trading using opposite Leggmason Partners and Harding Loevner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leggmason Partners position performs unexpectedly, Harding Loevner 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 Harding Loevner will offset losses from the drop in Harding Loevner's long position.| Leggmason Partners vs. Locorr Market Trend | Leggmason Partners vs. Pnc Emerging Markets | Leggmason Partners vs. Sp Midcap Index | Leggmason Partners vs. Investec Emerging Markets |
| Harding Loevner vs. Harding Loevner Funds | Harding Loevner vs. Harding Loevner Emerging | Harding Loevner vs. Harding Loevner Institutional | Harding Loevner vs. Harding Loevner Global |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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