Correlation Between Fs Managed and Harding Loevner

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

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

Diversification Opportunities for Fs Managed and Harding Loevner

-0.5

Correlation Coefficient

Fs Managed  Harding Loevner

Very good diversification

The 3 months correlation between FMFFX and Harding is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Fs Managed Futures and Harding Loevner Chinese in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harding Loevner Chinese and Fs Managed 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 Fs Managed Futures 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 Chinese has no effect on the direction of Fs Managed i.e., Fs Managed and Harding Loevner go up and down completely randomly.

Pair Corralation between Fs Managed and Harding Loevner

Assuming the 90 days horizon Fs Managed is expected to generate 3.53 times less return on investment than Harding Loevner. But when comparing it to its historical volatility, Fs Managed Futures is 9.46 times less risky than Harding Loevner. It trades about 0.25 of its potential returns per unit of risk. Harding Loevner Chinese is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  472.00  in Harding Loevner Chinese on September 3, 2024 and sell it today you would earn a total of  60.00  from holding Harding Loevner Chinese or generate 12.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	54.69%
Values	Daily Returns

Fs Managed Futures  vs.  Harding Loevner Chinese

Fs Managed Futures

Risk-Adjusted Performance

0 of 100

Solid

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

Harding Loevner Chinese

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Harding Loevner Chinese are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Harding Loevner showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fs Managed and Harding Loevner

The main advantage of trading using opposite Fs Managed and Harding Loevner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fs Managed 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 Fs Managed Futures and Harding Loevner Chinese 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.