Correlation Between Harding Loevner and Doubleline Emerging

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

By analyzing existing cross correlation between Harding Loevner Emerging and Doubleline Emerging Markets, you can compare the effects of market volatilities on Harding Loevner and Doubleline 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 Doubleline Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harding Loevner and Doubleline Emerging.

Diversification Opportunities for Harding Loevner and Doubleline Emerging

0.34

Correlation Coefficient

Harding Loevner  Doubleline Emerging

Weak diversification

The 3 months correlation between Harding and Doubleline is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Harding Loevner Emerging and Doubleline Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Doubleline Emerging 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 Emerging are associated (or correlated) with Doubleline Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Doubleline Emerging has no effect on the direction of Harding Loevner i.e., Harding Loevner and Doubleline Emerging go up and down completely randomly.

Pair Corralation between Harding Loevner and Doubleline Emerging

Assuming the 90 days horizon Harding Loevner Emerging is expected to under-perform the Doubleline Emerging. In addition to that, Harding Loevner is 5.26 times more volatile than Doubleline Emerging Markets. It trades about -0.19 of its total potential returns per unit of risk. Doubleline Emerging Markets is currently generating about -0.23 per unit of volatility. If you would invest  877.00  in Doubleline Emerging Markets on October 8, 2024 and sell it today you would lose (44.00) from holding Doubleline Emerging Markets or give up 5.02% of portfolio value over 90 days.

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

Harding Loevner Emerging  vs.  Doubleline Emerging Markets

Harding Loevner Emerging

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Harding Loevner Emerging 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 February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Doubleline Emerging

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Harding Loevner and Doubleline Emerging

The main advantage of trading using opposite Harding Loevner and Doubleline Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harding Loevner position performs unexpectedly, Doubleline 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 Doubleline Emerging will offset losses from the drop in Doubleline Emerging's long position.

The idea behind Harding Loevner Emerging and Doubleline Emerging Markets 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.