Correlation Between Nicholas and Harding Loevner
Can any of the company-specific risk be diversified away by investing in both Nicholas 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 Nicholas and Harding Loevner into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nicholas Ii Inc and Harding Loevner International, you can compare the effects of market volatilities on Nicholas 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 Nicholas with a short position of Harding Loevner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nicholas and Harding Loevner.
Diversification Opportunities for Nicholas and Harding Loevner
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nicholas and Harding is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Nicholas Ii Inc 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 Nicholas 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 Nicholas Ii Inc 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 Nicholas i.e., Nicholas and Harding Loevner go up and down completely randomly.
Pair Corralation between Nicholas and Harding Loevner
Assuming the 90 days horizon Nicholas Ii Inc is expected to generate 1.24 times more return on investment than Harding Loevner. However, Nicholas is 1.24 times more volatile than Harding Loevner International. It trades about 0.32 of its potential returns per unit of risk. Harding Loevner International is currently generating about -0.08 per unit of risk. If you would invest 3,364 in Nicholas Ii Inc on September 1, 2024 and sell it today you would earn a total of 240.00 from holding Nicholas Ii Inc or generate 7.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nicholas Ii Inc vs. Harding Loevner International
Performance |
| Timeline |
| Nicholas Ii |
| Harding Loevner Inte |
Nicholas and Harding Loevner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nicholas and Harding Loevner
The main advantage of trading using opposite Nicholas and Harding Loevner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nicholas 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.| Nicholas vs. Touchstone Sands Capital | Nicholas vs. Mid Cap Value | Nicholas vs. Fidelity Focused High | Nicholas vs. Harding Loevner International |
| Harding Loevner vs. Nicholas Ii Inc | Harding Loevner vs. Harding Loevner Emerging | Harding Loevner vs. Touchstone Sands Capital | 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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