Correlation Between Harding Loevner and Artisan International
Can any of the company-specific risk be diversified away by investing in both Harding Loevner and Artisan International 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 International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Harding Loevner International and Artisan International Small, you can compare the effects of market volatilities on Harding Loevner and Artisan International 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 International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harding Loevner and Artisan International.
Diversification Opportunities for Harding Loevner and Artisan International
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Harding and Artisan is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Harding Loevner International and Artisan International Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artisan International 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 International are associated (or correlated) with Artisan International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artisan International has no effect on the direction of Harding Loevner i.e., Harding Loevner and Artisan International go up and down completely randomly.
Pair Corralation between Harding Loevner and Artisan International
Assuming the 90 days horizon Harding Loevner International is expected to generate 1.0 times more return on investment than Artisan International. However, Harding Loevner is 1.0 times more volatile than Artisan International Small. It trades about 0.17 of its potential returns per unit of risk. Artisan International Small is currently generating about -0.09 per unit of risk. If you would invest 2,524 in Harding Loevner International on December 2, 2024 and sell it today you would earn a total of 75.00 from holding Harding Loevner International or generate 2.97% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Harding Loevner International vs. Artisan International Small
Performance |
Timeline |
Harding Loevner Inte |
Artisan International |
Harding Loevner and Artisan International Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Harding Loevner and Artisan International
The main advantage of trading using opposite Harding Loevner and Artisan International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harding Loevner position performs unexpectedly, Artisan International 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 International will offset losses from the drop in Artisan International's long position.Harding Loevner vs. Shelton Emerging Markets | Harding Loevner vs. Franklin Federal Limited Term | Harding Loevner vs. Jhancock Diversified Macro | Harding Loevner vs. Angel Oak Ultrashort |
Check out your portfolio center.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 Global Correlations module to find global opportunities by holding instruments from different markets.
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