Correlation Between High Yield and Harding Loevner
Can any of the company-specific risk be diversified away by investing in both High Yield 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 High Yield and Harding Loevner into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between High Yield Fund and Harding Loevner Frontier, you can compare the effects of market volatilities on High Yield 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 High Yield with a short position of Harding Loevner. Check out your portfolio center. Please also check ongoing floating volatility patterns of High Yield and Harding Loevner.
Diversification Opportunities for High Yield and Harding Loevner
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between High and Harding is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding High Yield Fund and Harding Loevner Frontier in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harding Loevner Frontier and High Yield 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 High Yield Fund 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 Frontier has no effect on the direction of High Yield i.e., High Yield and Harding Loevner go up and down completely randomly.
Pair Corralation between High Yield and Harding Loevner
Assuming the 90 days horizon High Yield Fund is expected to generate 0.48 times more return on investment than Harding Loevner. However, High Yield Fund is 2.09 times less risky than Harding Loevner. It trades about 0.16 of its potential returns per unit of risk. Harding Loevner Frontier is currently generating about 0.07 per unit of risk. If you would invest 586.00 in High Yield Fund on September 2, 2024 and sell it today you would earn a total of 93.00 from holding High Yield Fund or generate 15.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
High Yield Fund vs. Harding Loevner Frontier
Performance |
| Timeline |
| High Yield Fund |
| Harding Loevner Frontier |
High Yield and Harding Loevner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with High Yield and Harding Loevner
The main advantage of trading using opposite High Yield and Harding Loevner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if High Yield 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.| High Yield vs. Bbh Intermediate Municipal | High Yield vs. Dreyfusstandish Global Fixed | High Yield vs. Multisector Bond Sma | High Yield vs. T Rowe Price |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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