Correlation Between Harding Loevner and Defensive Market
Can any of the company-specific risk be diversified away by investing in both Harding Loevner and Defensive Market 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 Defensive Market into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Harding Loevner Global and Defensive Market Strategies, you can compare the effects of market volatilities on Harding Loevner and Defensive Market 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 Defensive Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harding Loevner and Defensive Market.
Diversification Opportunities for Harding Loevner and Defensive Market
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Harding and Defensive is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Harding Loevner Global and Defensive Market Strategies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Defensive Market Str 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 Global are associated (or correlated) with Defensive Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Defensive Market Str has no effect on the direction of Harding Loevner i.e., Harding Loevner and Defensive Market go up and down completely randomly.
Pair Corralation between Harding Loevner and Defensive Market
Assuming the 90 days horizon Harding Loevner is expected to generate 1.39 times less return on investment than Defensive Market. In addition to that, Harding Loevner is 1.99 times more volatile than Defensive Market Strategies. It trades about 0.08 of its total potential returns per unit of risk. Defensive Market Strategies is currently generating about 0.23 per unit of volatility. If you would invest 1,166 in Defensive Market Strategies on June 12, 2025 and sell it today you would earn a total of 57.00 from holding Defensive Market Strategies or generate 4.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harding Loevner Global vs. Defensive Market Strategies
Performance |
| Timeline |
| Harding Loevner Global |
| Defensive Market Str |
Harding Loevner and Defensive Market Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harding Loevner and Defensive Market
The main advantage of trading using opposite Harding Loevner and Defensive Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harding Loevner position performs unexpectedly, Defensive Market 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 Defensive Market will offset losses from the drop in Defensive Market's long position.| Harding Loevner vs. Delaware Healthcare Fund | Harding Loevner vs. The Hartford Healthcare | Harding Loevner vs. Alphacentric Lifesci Healthcare | Harding Loevner vs. Schwab Health Care |
| Defensive Market vs. Multisector Bond Sma | Defensive Market vs. Enhanced Fixed Income | Defensive Market vs. Blrc Sgy Mnp | Defensive Market vs. Artisan High Income |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |