Correlation Between Multi-manager High and Harding Loevner
Can any of the company-specific risk be diversified away by investing in both Multi-manager High 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 Multi-manager High and Harding Loevner into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Multi Manager High Yield and Harding Loevner Global, you can compare the effects of market volatilities on Multi-manager High 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 Multi-manager High with a short position of Harding Loevner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multi-manager High and Harding Loevner.
Diversification Opportunities for Multi-manager High and Harding Loevner
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Multi-manager and Harding is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Multi Manager High Yield and Harding Loevner Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harding Loevner Global and Multi-manager High 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 Multi Manager High Yield 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 Global has no effect on the direction of Multi-manager High i.e., Multi-manager High and Harding Loevner go up and down completely randomly.
Pair Corralation between Multi-manager High and Harding Loevner
Assuming the 90 days horizon Multi Manager High Yield is expected to generate 0.16 times more return on investment than Harding Loevner. However, Multi Manager High Yield is 6.14 times less risky than Harding Loevner. It trades about 0.16 of its potential returns per unit of risk. Harding Loevner Global is currently generating about 0.01 per unit of risk. If you would invest 714.00 in Multi Manager High Yield on November 2, 2024 and sell it today you would earn a total of 135.00 from holding Multi Manager High Yield or generate 18.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Multi Manager High Yield vs. Harding Loevner Global
Performance |
| Timeline |
| Multi Manager High |
| Harding Loevner Global |
Multi-manager High and Harding Loevner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multi-manager High and Harding Loevner
The main advantage of trading using opposite Multi-manager High and Harding Loevner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multi-manager High 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.| Multi-manager High vs. Davis Financial Fund | Multi-manager High vs. Aig Government Money | Multi-manager High vs. Angel Oak Financial | Multi-manager High vs. Financial Industries Fund |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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