Correlation Between Virtus Emerging and Harding Loevner
Can any of the company-specific risk be diversified away by investing in both Virtus Emerging 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 Virtus Emerging and Harding Loevner into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virtus Emerging Markets and Harding Loevner Institutional, you can compare the effects of market volatilities on Virtus Emerging 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 Virtus Emerging with a short position of Harding Loevner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Emerging and Harding Loevner.
Diversification Opportunities for Virtus Emerging and Harding Loevner
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Virtus and Harding is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Emerging Markets and Harding Loevner Institutional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harding Loevner Inst and Virtus Emerging 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 Virtus Emerging Markets 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 Inst has no effect on the direction of Virtus Emerging i.e., Virtus Emerging and Harding Loevner go up and down completely randomly.
Pair Corralation between Virtus Emerging and Harding Loevner
Assuming the 90 days horizon Virtus Emerging Markets is expected to under-perform the Harding Loevner. In addition to that, Virtus Emerging is 1.14 times more volatile than Harding Loevner Institutional. It trades about -0.34 of its total potential returns per unit of risk. Harding Loevner Institutional is currently generating about -0.14 per unit of volatility. If you would invest 1,827 in Harding Loevner Institutional on January 17, 2024 and sell it today you would lose (42.00) from holding Harding Loevner Institutional or give up 2.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virtus Emerging Markets vs. Harding Loevner Institutional
Performance |
| Timeline |
| Virtus Emerging Markets |
| Harding Loevner Inst |
Virtus Emerging and Harding Loevner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus Emerging and Harding Loevner
The main advantage of trading using opposite Virtus Emerging and Harding Loevner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus Emerging 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.| Virtus Emerging vs. Metropolitan West Total | Virtus Emerging vs. Janus Flexible Bond | Virtus Emerging vs. Eaton Vance Income | Virtus Emerging vs. Mfs Emerging Markets |
| Harding Loevner vs. Ssga International Stock | Harding Loevner vs. Schwab E Equity | Harding Loevner vs. Driehaus Emerging Markets | Harding Loevner vs. Columbia Emerging Markets |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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