Correlation Between Nicholas and Harding Loevner

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

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

Diversification Opportunities for Nicholas and Harding Loevner

0.02

Correlation Coefficient

Nicholas  Harding Loevner

Significant diversification

The 3 months correlation between Nicholas and Harding is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Nicholas Ii Inc and Harding Loevner Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harding Loevner Emerging and Nicholas 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 Nicholas Ii Inc 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 Emerging has no effect on the direction of Nicholas i.e., Nicholas and Harding Loevner go up and down completely randomly.

Pair Corralation between Nicholas and Harding Loevner

Assuming the 90 days horizon Nicholas Ii Inc is expected to generate 0.87 times more return on investment than Harding Loevner. However, Nicholas Ii Inc is 1.14 times less risky than Harding Loevner. It trades about 0.19 of its potential returns per unit of risk. Harding Loevner Emerging is currently generating about 0.02 per unit of risk. If you would invest  3,273  in Nicholas Ii Inc on September 4, 2024 and sell it today you would earn a total of  323.00  from holding Nicholas Ii Inc or generate 9.87% return on investment over 90 days.

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

Nicholas Ii Inc  vs.  Harding Loevner Emerging

Nicholas Ii

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nicholas Ii Inc are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Nicholas may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Harding Loevner Emerging

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Harding Loevner Emerging are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong primary 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 Nicholas and Harding Loevner

The main advantage of trading using opposite Nicholas and Harding Loevner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nicholas 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 Nicholas Ii Inc and Harding Loevner Emerging 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.