Correlation Between Firsthand Technology and Harding Loevner
Can any of the company-specific risk be diversified away by investing in both Firsthand Technology 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 Firsthand Technology and Harding Loevner into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Firsthand Technology Opportunities and Harding Loevner Frontier, you can compare the effects of market volatilities on Firsthand Technology 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 Firsthand Technology with a short position of Harding Loevner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Firsthand Technology and Harding Loevner.
Diversification Opportunities for Firsthand Technology and Harding Loevner
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Firsthand and Harding is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Firsthand Technology Opportuni 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 Firsthand Technology 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 Firsthand Technology Opportunities 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 Firsthand Technology i.e., Firsthand Technology and Harding Loevner go up and down completely randomly.
Pair Corralation between Firsthand Technology and Harding Loevner
Assuming the 90 days horizon Firsthand Technology Opportunities is expected to generate 3.52 times more return on investment than Harding Loevner. However, Firsthand Technology is 3.52 times more volatile than Harding Loevner Frontier. It trades about 0.37 of its potential returns per unit of risk. Harding Loevner Frontier is currently generating about -0.18 per unit of risk. If you would invest 360.00 in Firsthand Technology Opportunities on September 4, 2024 and sell it today you would earn a total of 46.00 from holding Firsthand Technology Opportunities or generate 12.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Firsthand Technology Opportuni vs. Harding Loevner Frontier
Performance |
| Timeline |
| Firsthand Technology |
| Harding Loevner Frontier |
Firsthand Technology and Harding Loevner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Firsthand Technology and Harding Loevner
The main advantage of trading using opposite Firsthand Technology and Harding Loevner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Firsthand Technology 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.| Firsthand Technology vs. Berkshire Focus | Firsthand Technology vs. Red Oak Technology | Firsthand Technology vs. Jacob Internet Fund | Firsthand Technology vs. Kinetics Internet Fund |
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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