Correlation Between Balanced Fund and Harding Loevner
Can any of the company-specific risk be diversified away by investing in both Balanced Fund 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 Balanced Fund and Harding Loevner into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Balanced Fund Investor and Harding Loevner International, you can compare the effects of market volatilities on Balanced Fund 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 Balanced Fund with a short position of Harding Loevner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Balanced Fund and Harding Loevner.
Diversification Opportunities for Balanced Fund and Harding Loevner
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Balanced and Harding is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Balanced Fund Investor 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 Balanced Fund 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 Balanced Fund Investor 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 Balanced Fund i.e., Balanced Fund and Harding Loevner go up and down completely randomly.
Pair Corralation between Balanced Fund and Harding Loevner
Assuming the 90 days horizon Balanced Fund Investor is expected to under-perform the Harding Loevner. But the mutual fund apears to be less risky and, when comparing its historical volatility, Balanced Fund Investor is 1.4 times less risky than Harding Loevner. The mutual fund trades about -0.11 of its potential returns per unit of risk. The Harding Loevner International is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 1,318 in Harding Loevner International on December 4, 2024 and sell it today you would earn a total of 70.00 from holding Harding Loevner International or generate 5.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Balanced Fund Investor vs. Harding Loevner International
Performance |
| Timeline |
| Balanced Fund Investor |
| Harding Loevner Inte |
Balanced Fund and Harding Loevner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Balanced Fund and Harding Loevner
The main advantage of trading using opposite Balanced Fund and Harding Loevner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Balanced Fund 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.| Balanced Fund vs. Select Fund Investor | Balanced Fund vs. Heritage Fund Investor | Balanced Fund vs. Value Fund Investor | Balanced Fund vs. Growth Fund Investor |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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