Correlation Between NYSE Composite and Harding Loevner
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Harding Loevner into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Harding Loevner Institutional, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Harding Loevner. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Harding Loevner.
Diversification Opportunities for NYSE Composite and Harding Loevner
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between NYSE and Harding is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Harding Loevner Institutional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harding Loevner Inst and NYSE Composite 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 NYSE Composite 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 Inst has no effect on the direction of NYSE Composite i.e., NYSE Composite and Harding Loevner go up and down completely randomly.
Pair Corralation between NYSE Composite and Harding Loevner
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.78 times more return on investment than Harding Loevner. However, NYSE Composite is 1.28 times less risky than Harding Loevner. It trades about 0.42 of its potential returns per unit of risk. Harding Loevner Institutional is currently generating about -0.12 per unit of risk. If you would invest 1,923,895 in NYSE Composite on September 1, 2024 and sell it today you would earn a total of 103,309 from holding NYSE Composite or generate 5.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
NYSE Composite vs. Harding Loevner Institutional
Performance |
| Timeline |
NYSE Composite and Harding Loevner Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Harding Loevner Institutional
Pair trading matchups for Harding Loevner
Pair Trading with NYSE Composite and Harding Loevner
The main advantage of trading using opposite NYSE Composite and Harding Loevner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Acumen Pharmaceuticals | NYSE Composite vs. Mind Medicine | NYSE Composite vs. NL Industries | NYSE Composite vs. Ecovyst |
| Harding Loevner vs. Harding Loevner Funds | Harding Loevner vs. Harding Loevner Emerging | Harding Loevner vs. Harding Loevner Global | Harding Loevner vs. Harding Loevner Frontier |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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