Correlation Between Harding Loevner and Wasatch Emerging
Can any of the company-specific risk be diversified away by investing in both Harding Loevner and Wasatch Emerging 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 Harding Loevner and Wasatch Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Harding Loevner Frontier and Wasatch Emerging Markets, you can compare the effects of market volatilities on Harding Loevner and Wasatch Emerging 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 Harding Loevner with a short position of Wasatch Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harding Loevner and Wasatch Emerging.
Diversification Opportunities for Harding Loevner and Wasatch Emerging
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Harding and Wasatch is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Harding Loevner Frontier and Wasatch Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wasatch Emerging Markets and Harding Loevner 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 Harding Loevner Frontier are associated (or correlated) with Wasatch Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wasatch Emerging Markets has no effect on the direction of Harding Loevner i.e., Harding Loevner and Wasatch Emerging go up and down completely randomly.
Pair Corralation between Harding Loevner and Wasatch Emerging
Assuming the 90 days horizon Harding Loevner Frontier is expected to generate 0.71 times more return on investment than Wasatch Emerging. However, Harding Loevner Frontier is 1.4 times less risky than Wasatch Emerging. It trades about 0.12 of its potential returns per unit of risk. Wasatch Emerging Markets is currently generating about 0.05 per unit of risk. If you would invest 734.00 in Harding Loevner Frontier on February 3, 2024 and sell it today you would earn a total of 30.00 from holding Harding Loevner Frontier or generate 4.09% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Harding Loevner Frontier vs. Wasatch Emerging Markets
Performance |
Timeline |
Harding Loevner Frontier |
Wasatch Emerging Markets |
Harding Loevner and Wasatch Emerging Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Harding Loevner and Wasatch Emerging
The main advantage of trading using opposite Harding Loevner and Wasatch Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harding Loevner position performs unexpectedly, Wasatch Emerging 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 Wasatch Emerging will offset losses from the drop in Wasatch Emerging's long position.Harding Loevner vs. Rbc Microcap Value | Harding Loevner vs. Tfa Alphagen Growth | Harding Loevner vs. Omni Small Cap Value | Harding Loevner vs. T Rowe Price |
Wasatch Emerging vs. Wasatch International Opportunities | Wasatch Emerging vs. Wasatch International Growth | Wasatch Emerging vs. Wasatch Frontier Emerging | Wasatch Emerging vs. Wasatch Micro Cap |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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