Correlation Between Amana Developing and Harding Loevner
Can any of the company-specific risk be diversified away by investing in both Amana Developing 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 Amana Developing and Harding Loevner into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amana Developing World and Harding Loevner Emerging, you can compare the effects of market volatilities on Amana Developing 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 Amana Developing with a short position of Harding Loevner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amana Developing and Harding Loevner.
Diversification Opportunities for Amana Developing and Harding Loevner
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Amana and Harding is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Amana Developing World and Harding Loevner Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harding Loevner Emerging and Amana Developing 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 Amana Developing World 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 Emerging has no effect on the direction of Amana Developing i.e., Amana Developing and Harding Loevner go up and down completely randomly.
Pair Corralation between Amana Developing and Harding Loevner
Assuming the 90 days horizon Amana Developing World is expected to under-perform the Harding Loevner. But the mutual fund apears to be less risky and, when comparing its historical volatility, Amana Developing World is 1.34 times less risky than Harding Loevner. The mutual fund trades about -0.35 of its potential returns per unit of risk. The Harding Loevner Emerging is currently generating about -0.21 of returns per unit of risk over similar time horizon. If you would invest 4,079 in Harding Loevner Emerging on January 20, 2024 and sell it today you would lose (149.00) from holding Harding Loevner Emerging or give up 3.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Amana Developing World vs. Harding Loevner Emerging
Performance |
| Timeline |
| Amana Developing World |
| Harding Loevner Emerging |
Amana Developing and Harding Loevner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amana Developing and Harding Loevner
The main advantage of trading using opposite Amana Developing and Harding Loevner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amana Developing 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.| Amana Developing vs. Amana Growth Fund | Amana Developing vs. Amana Income Fund | Amana Developing vs. Amana Participation Fund | Amana Developing vs. Amana Participation Fund |
| Harding Loevner vs. Ssga International Stock | Harding Loevner vs. Schwab E Equity | Harding Loevner vs. Driehaus Emerging Markets | Harding Loevner vs. Columbia Emerging Markets |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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