Correlation Between Arrow Managed and Harding Loevner
Can any of the company-specific risk be diversified away by investing in both Arrow Managed 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 Arrow Managed and Harding Loevner into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arrow Managed Futures and Harding Loevner International, you can compare the effects of market volatilities on Arrow Managed 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 Arrow Managed with a short position of Harding Loevner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arrow Managed and Harding Loevner.
Diversification Opportunities for Arrow Managed and Harding Loevner
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Arrow and Harding is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Arrow Managed Futures 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 Arrow Managed 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 Arrow Managed Futures 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 Arrow Managed i.e., Arrow Managed and Harding Loevner go up and down completely randomly.
Pair Corralation between Arrow Managed and Harding Loevner
Assuming the 90 days horizon Arrow Managed Futures is expected to generate 1.63 times more return on investment than Harding Loevner. However, Arrow Managed is 1.63 times more volatile than Harding Loevner International. It trades about 0.26 of its potential returns per unit of risk. Harding Loevner International is currently generating about -0.05 per unit of risk. If you would invest 542.00 in Arrow Managed Futures on September 12, 2024 and sell it today you would earn a total of 33.00 from holding Arrow Managed Futures or generate 6.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arrow Managed Futures vs. Harding Loevner International
Performance |
| Timeline |
| Arrow Managed Futures |
| Harding Loevner Inte |
Arrow Managed and Harding Loevner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arrow Managed and Harding Loevner
The main advantage of trading using opposite Arrow Managed and Harding Loevner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arrow Managed 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.| Arrow Managed vs. Artisan Small Cap | Arrow Managed vs. Mid Cap Growth | Arrow Managed vs. L Abbett Growth | Arrow Managed vs. Chase Growth Fund |
| Harding Loevner vs. Rbc Emerging Markets | Harding Loevner vs. Transamerica Emerging Markets | Harding Loevner vs. Ab All Market | Harding Loevner vs. Investec Emerging Markets |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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