Correlation Between Index Plus and Harding Loevner
Can any of the company-specific risk be diversified away by investing in both Index Plus 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 Index Plus and Harding Loevner into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Index Plus Largecap and Harding Loevner International, you can compare the effects of market volatilities on Index Plus 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 Index Plus with a short position of Harding Loevner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Index Plus and Harding Loevner.
Diversification Opportunities for Index Plus and Harding Loevner
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Index and Harding is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Index Plus Largecap 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 Index Plus 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 Index Plus Largecap 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 Index Plus i.e., Index Plus and Harding Loevner go up and down completely randomly.
Pair Corralation between Index Plus and Harding Loevner
Assuming the 90 days horizon Index Plus Largecap is expected to generate 1.03 times more return on investment than Harding Loevner. However, Index Plus is 1.03 times more volatile than Harding Loevner International. It trades about 0.13 of its potential returns per unit of risk. Harding Loevner International is currently generating about 0.0 per unit of risk. If you would invest 2,640 in Index Plus Largecap on September 1, 2024 and sell it today you would earn a total of 398.00 from holding Index Plus Largecap or generate 15.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Index Plus Largecap vs. Harding Loevner International
Performance |
| Timeline |
| Index Plus Largecap |
| Harding Loevner Inte |
Index Plus and Harding Loevner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Index Plus and Harding Loevner
The main advantage of trading using opposite Index Plus and Harding Loevner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Index Plus 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.| Index Plus vs. Virtus Real Estate | Index Plus vs. Deutsche Real Estate | Index Plus vs. Fidelity Real Estate | Index Plus vs. Dunham Real Estate |
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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