Correlation Between Delaware Value and Harding Loevner

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

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

Diversification Opportunities for Delaware Value and Harding Loevner

0.23

Correlation Coefficient

Delaware Value  Harding Loevner

Modest diversification

The 3 months correlation between Delaware and Harding is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Delaware Value Fund 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 Delaware Value 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 Delaware Value Fund 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 Delaware Value i.e., Delaware Value and Harding Loevner go up and down completely randomly.

Pair Corralation between Delaware Value and Harding Loevner

Assuming the 90 days horizon Delaware Value Fund is expected to under-perform the Harding Loevner. But the mutual fund apears to be less risky and, when comparing its historical volatility, Delaware Value Fund is 1.14 times less risky than Harding Loevner. The mutual fund trades about -0.01 of its potential returns per unit of risk. The Harding Loevner International is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  2,455  in Harding Loevner International on December 30, 2024 and sell it today you would earn a total of  156.00  from holding Harding Loevner International or generate 6.35% return on investment over 90 days.

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

Delaware Value Fund  vs.  Harding Loevner International

Delaware Value

Risk-Adjusted Performance

Very Weak

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

Harding Loevner Inte

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Harding Loevner International are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Harding Loevner may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Delaware Value and Harding Loevner

The main advantage of trading using opposite Delaware Value and Harding Loevner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delaware Value 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 Delaware Value Fund 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.