Correlation Between Wasatch Frontier and Harding Loevner
Can any of the company-specific risk be diversified away by investing in both Wasatch Frontier 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 Wasatch Frontier and Harding Loevner into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wasatch Frontier Emerging and Harding Loevner Frontier, you can compare the effects of market volatilities on Wasatch Frontier 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 Wasatch Frontier with a short position of Harding Loevner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wasatch Frontier and Harding Loevner.
Diversification Opportunities for Wasatch Frontier and Harding Loevner
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wasatch and Harding is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Wasatch Frontier Emerging 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 Wasatch Frontier 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 Wasatch Frontier Emerging 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 Wasatch Frontier i.e., Wasatch Frontier and Harding Loevner go up and down completely randomly.
Pair Corralation between Wasatch Frontier and Harding Loevner
Assuming the 90 days horizon Wasatch Frontier Emerging is expected to generate 1.67 times more return on investment than Harding Loevner. However, Wasatch Frontier is 1.67 times more volatile than Harding Loevner Frontier. It trades about 0.14 of its potential returns per unit of risk. Harding Loevner Frontier is currently generating about -0.12 per unit of risk. If you would invest 352.00 in Wasatch Frontier Emerging on November 4, 2024 and sell it today you would earn a total of 8.00 from holding Wasatch Frontier Emerging or generate 2.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wasatch Frontier Emerging vs. Harding Loevner Frontier
Performance |
| Timeline |
| Wasatch Frontier Emerging |
| Harding Loevner Frontier |
Wasatch Frontier and Harding Loevner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wasatch Frontier and Harding Loevner
The main advantage of trading using opposite Wasatch Frontier and Harding Loevner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wasatch Frontier 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.| Wasatch Frontier vs. Wasatch International Opportunities | Wasatch Frontier vs. Harding Loevner Frontier |
| Harding Loevner vs. Global Diversified Income | Harding Loevner vs. Jpmorgan Diversified Fund | Harding Loevner vs. Diversified Income Fund | Harding Loevner vs. Allianzgi Diversified Income |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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