Correlation Between Old Westbury and Harding Loevner
Can any of the company-specific risk be diversified away by investing in both Old Westbury 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 Old Westbury and Harding Loevner into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Old Westbury Large and Harding Loevner International, you can compare the effects of market volatilities on Old Westbury 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 Old Westbury with a short position of Harding Loevner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Westbury and Harding Loevner.
Diversification Opportunities for Old Westbury and Harding Loevner
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Old and Harding is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Old Westbury Large 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 Old Westbury 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 Old Westbury Large 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 Old Westbury i.e., Old Westbury and Harding Loevner go up and down completely randomly.
Pair Corralation between Old Westbury and Harding Loevner
Assuming the 90 days horizon Old Westbury Large is expected to generate 0.74 times more return on investment than Harding Loevner. However, Old Westbury Large is 1.34 times less risky than Harding Loevner. It trades about 0.34 of its potential returns per unit of risk. Harding Loevner International is currently generating about -0.1 per unit of risk. If you would invest 2,063 in Old Westbury Large on September 4, 2024 and sell it today you would earn a total of 87.00 from holding Old Westbury Large or generate 4.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Old Westbury Large vs. Harding Loevner International
Performance |
| Timeline |
| Old Westbury Large |
| Harding Loevner Inte |
Old Westbury and Harding Loevner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Old Westbury and Harding Loevner
The main advantage of trading using opposite Old Westbury and Harding Loevner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Westbury 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.| Old Westbury vs. Us Government Securities | Old Westbury vs. Short Term Government Fund | Old Westbury vs. Prudential Government Income | Old Westbury vs. Us Government Plus |
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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