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 International, 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
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between NYSE and Harding is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite 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 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 Inte 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 0.76 times more return on investment than Harding Loevner. However, NYSE Composite is 1.32 times less risky than Harding Loevner. It trades about 0.27 of its potential returns per unit of risk. Harding Loevner International is currently generating about -0.21 per unit of risk. If you would invest 1,945,669 in NYSE Composite on August 30, 2024 and sell it today you would earn a total of 75,313 from holding NYSE Composite or generate 3.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Harding Loevner International
Performance |
| Timeline |
NYSE Composite and Harding Loevner Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Harding Loevner International
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. Delek Drilling | NYSE Composite vs. Helmerich and Payne | NYSE Composite vs. Waste Management | NYSE Composite vs. US Global Investors |
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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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