Correlation Between Pender Real and Harding Loevner
Can any of the company-specific risk be diversified away by investing in both Pender Real 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 Pender Real and Harding Loevner into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pender Real Estate and Harding Loevner Frontier, you can compare the effects of market volatilities on Pender Real 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 Pender Real with a short position of Harding Loevner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pender Real and Harding Loevner.
Diversification Opportunities for Pender Real and Harding Loevner
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Pender and Harding is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Pender Real Estate 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 Pender Real 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 Pender Real Estate 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 Pender Real i.e., Pender Real and Harding Loevner go up and down completely randomly.
Pair Corralation between Pender Real and Harding Loevner
Assuming the 90 days horizon Pender Real is expected to generate 1.0 times less return on investment than Harding Loevner. But when comparing it to its historical volatility, Pender Real Estate is 2.77 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 0.06 of returns per unit of risk over similar time horizon. If you would invest 689.00 in Harding Loevner Frontier on November 2, 2024 and sell it today you would earn a total of 110.00 from holding Harding Loevner Frontier or generate 15.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 89.68% |
| Values | Daily Returns |
Pender Real Estate vs. Harding Loevner Frontier
Performance |
| Timeline |
| Pender Real Estate |
| Harding Loevner Frontier |
Pender Real and Harding Loevner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pender Real and Harding Loevner
The main advantage of trading using opposite Pender Real and Harding Loevner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pender Real 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.| Pender Real vs. Goldman Sachs High | Pender Real vs. Barings High Yield | Pender Real vs. Needham Aggressive Growth | Pender Real vs. Aqr Risk Parity |
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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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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