Correlation Between Harding Loevner and Artisan Global

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

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

Diversification Opportunities for Harding Loevner and Artisan Global

0.69

Correlation Coefficient

Harding Loevner  Artisan Global

Poor diversification

The 3 months correlation between Harding and Artisan is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Harding Loevner Global and Artisan Global Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artisan Global Value 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 Global are associated (or correlated) with Artisan Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artisan Global Value has no effect on the direction of Harding Loevner i.e., Harding Loevner and Artisan Global go up and down completely randomly.

Pair Corralation between Harding Loevner and Artisan Global

Assuming the 90 days horizon Harding Loevner Global is expected to under-perform the Artisan Global. In addition to that, Harding Loevner is 3.59 times more volatile than Artisan Global Value. It trades about -0.1 of its total potential returns per unit of risk. Artisan Global Value is currently generating about -0.02 per unit of volatility. If you would invest  2,351  in Artisan Global Value on October 24, 2024 and sell it today you would lose (32.00) from holding Artisan Global Value or give up 1.36% of portfolio value over 90 days.

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

Harding Loevner Global  vs.  Artisan Global Value

Harding Loevner Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Harding Loevner Global 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 basic 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.

Artisan Global Value

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Artisan Global Value has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Artisan Global 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 Artisan Global

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

The idea behind Harding Loevner Global and Artisan Global Value 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.