Correlation Between Alps/corecommodity and Harding Loevner

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

By analyzing existing cross correlation between Alpscorecommodity Management Pletecommoditiessm and Harding Loevner International, you can compare the effects of market volatilities on Alps/corecommodity 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 Alps/corecommodity with a short position of Harding Loevner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alps/corecommodity and Harding Loevner.

Diversification Opportunities for Alps/corecommodity and Harding Loevner

0.73

Correlation Coefficient

Alps/corecommodity  Harding Loevner

Poor diversification

The 3 months correlation between Alps/corecommodity and Harding is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Alpscorecommodity Management P and Harding Loevner International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harding Loevner Inte and Alps/corecommodity 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 Alpscorecommodity Management Pletecommoditiessm 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 Inte has no effect on the direction of Alps/corecommodity i.e., Alps/corecommodity and Harding Loevner go up and down completely randomly.

Pair Corralation between Alps/corecommodity and Harding Loevner

Assuming the 90 days horizon Alpscorecommodity Management Pletecommoditiessm is expected to generate 0.51 times more return on investment than Harding Loevner. However, Alpscorecommodity Management Pletecommoditiessm is 1.98 times less risky than Harding Loevner. It trades about -0.07 of its potential returns per unit of risk. Harding Loevner International is currently generating about -0.32 per unit of risk. If you would invest  721.00  in Alpscorecommodity Management Pletecommoditiessm on October 12, 2024 and sell it today you would lose (7.00) from holding Alpscorecommodity Management Pletecommoditiessm or give up 0.97% of portfolio value over 90 days.

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

Alpscorecommodity Management P  vs.  Harding Loevner International

Alps/corecommodity

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alpscorecommodity Management Pletecommoditiessm has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Alps/corecommodity is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Harding Loevner Inte

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Harding Loevner International has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Alps/corecommodity and Harding Loevner

The main advantage of trading using opposite Alps/corecommodity and Harding Loevner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alps/corecommodity 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 Alpscorecommodity Management Pletecommoditiessm and Harding Loevner International 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 Global Correlations module to find global opportunities by holding instruments from different markets.