Correlation Between Artisan Mid and Harding Loevner

Can any of the company-specific risk be diversified away by investing in both Artisan Mid 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 Artisan Mid and Harding Loevner into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Artisan Mid Cap and Harding Loevner International, you can compare the effects of market volatilities on Artisan Mid 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 Artisan Mid with a short position of Harding Loevner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Artisan Mid and Harding Loevner.

Diversification Opportunities for Artisan Mid and Harding Loevner

0.66

Correlation Coefficient

Artisan Mid  Harding Loevner

Poor diversification

The 3 months correlation between Artisan and Harding is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Mid Cap 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 Artisan Mid 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 Artisan Mid Cap 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 Artisan Mid i.e., Artisan Mid and Harding Loevner go up and down completely randomly.

Pair Corralation between Artisan Mid and Harding Loevner

Assuming the 90 days horizon Artisan Mid Cap is expected to under-perform the Harding Loevner. In addition to that, Artisan Mid is 2.11 times more volatile than Harding Loevner International. It trades about -0.12 of its total potential returns per unit of risk. Harding Loevner International is currently generating about 0.01 per unit of volatility. If you would invest  2,643  in Harding Loevner International on November 29, 2024 and sell it today you would earn a total of  7.00  from holding Harding Loevner International or generate 0.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Artisan Mid Cap  vs.  Harding Loevner International

Artisan Mid Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Artisan Mid Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's primary indicators remain fairly strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Harding Loevner Inte

Risk-Adjusted Performance

Very Weak

Over the last 90 days Harding Loevner International has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Harding Loevner is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Artisan Mid and Harding Loevner

The main advantage of trading using opposite Artisan Mid and Harding Loevner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Artisan Mid 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.

The idea behind Artisan Mid Cap and Harding Loevner International pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.