Correlation Between Harding Loevner and Virtus Emerging
Can any of the company-specific risk be diversified away by investing in both Harding Loevner and Virtus Emerging 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 Virtus Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Harding Loevner Institutional and Virtus Emerging Markets, you can compare the effects of market volatilities on Harding Loevner and Virtus Emerging 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 Virtus Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harding Loevner and Virtus Emerging.
Diversification Opportunities for Harding Loevner and Virtus Emerging
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Harding and Virtus is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Harding Loevner Institutional and Virtus Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Emerging Markets 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 Institutional are associated (or correlated) with Virtus Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Emerging Markets has no effect on the direction of Harding Loevner i.e., Harding Loevner and Virtus Emerging go up and down completely randomly.
Pair Corralation between Harding Loevner and Virtus Emerging
Assuming the 90 days horizon Harding Loevner Institutional is expected to generate 0.92 times more return on investment than Virtus Emerging. However, Harding Loevner Institutional is 1.09 times less risky than Virtus Emerging. It trades about -0.11 of its potential returns per unit of risk. Virtus Emerging Markets is currently generating about -0.16 per unit of risk. If you would invest 1,833 in Harding Loevner Institutional on January 26, 2024 and sell it today you would lose (41.00) from holding Harding Loevner Institutional or give up 2.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harding Loevner Institutional vs. Virtus Emerging Markets
Performance |
| Timeline |
| Harding Loevner Inst |
| Virtus Emerging Markets |
Harding Loevner and Virtus Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harding Loevner and Virtus Emerging
The main advantage of trading using opposite Harding Loevner and Virtus Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harding Loevner position performs unexpectedly, Virtus Emerging 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 Virtus Emerging will offset losses from the drop in Virtus Emerging's long position.| Harding Loevner vs. Amana Income Fund | Harding Loevner vs. Amana Growth Fund | Harding Loevner vs. Amana Participation Fund | Harding Loevner vs. HUMANA INC |
| Virtus Emerging vs. Amana Income Fund | Virtus Emerging vs. Amana Growth Fund | Virtus Emerging vs. Amana Participation Fund | Virtus Emerging vs. HUMANA INC |
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 CEOs Directory module to screen CEOs from public companies around the world.
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