Correlation Between Harding Loevner and Fidelity Advisor

Can any of the company-specific risk be diversified away by investing in both Harding Loevner and Fidelity Advisor 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 Fidelity Advisor 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 Fidelity Advisor Sustainable, you can compare the effects of market volatilities on Harding Loevner and Fidelity Advisor 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 Fidelity Advisor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harding Loevner and Fidelity Advisor.

Diversification Opportunities for Harding Loevner and Fidelity Advisor

0.57

Correlation Coefficient

Harding Loevner  Fidelity Advisor

Very weak diversification

The 3 months correlation between Harding and Fidelity is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Harding Loevner Global and Fidelity Advisor Sustainable in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advisor Sus 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 Fidelity Advisor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Advisor Sus has no effect on the direction of Harding Loevner i.e., Harding Loevner and Fidelity Advisor go up and down completely randomly.

Pair Corralation between Harding Loevner and Fidelity Advisor

Assuming the 90 days horizon Harding Loevner is expected to generate 3.4 times less return on investment than Fidelity Advisor. In addition to that, Harding Loevner is 2.28 times more volatile than Fidelity Advisor Sustainable. It trades about 0.01 of its total potential returns per unit of risk. Fidelity Advisor Sustainable is currently generating about 0.08 per unit of volatility. If you would invest  855.00  in Fidelity Advisor Sustainable on October 26, 2024 and sell it today you would earn a total of  206.00  from holding Fidelity Advisor Sustainable or generate 24.09% return on investment over 90 days.

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

Harding Loevner Global  vs.  Fidelity Advisor Sustainable

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.

Fidelity Advisor Sus

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Advisor Sustainable are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong primary indicators, Fidelity Advisor 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 Fidelity Advisor

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

The idea behind Harding Loevner Global and Fidelity Advisor Sustainable 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.