Correlation Between Global X and Harding Loevner

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

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

Diversification Opportunities for Global X and Harding Loevner

0.0

Correlation Coefficient

Global X  Harding Loevner

Pay attention - limited upside

The 3 months correlation between Global and Harding is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Global X and Harding Loevner Frontier in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harding Loevner Frontier and Global X 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 Global X 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 Frontier has no effect on the direction of Global X i.e., Global X and Harding Loevner go up and down completely randomly.

Pair Corralation between Global X and Harding Loevner

If you would invest (100.00) in Global X on December 2, 2024 and sell it today you would earn a total of  100.00  from holding Global X or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Global X  vs.  Harding Loevner Frontier

Global X

Risk-Adjusted Performance

Very Weak

Over the last 90 days Global X has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Global X is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Harding Loevner Frontier

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Global X and Harding Loevner

The main advantage of trading using opposite Global X and Harding Loevner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X 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 Global X and Harding Loevner Frontier 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.