Correlation Between Harding Loevner and Sprott Focus
Can any of the company-specific risk be diversified away by investing in both Harding Loevner and Sprott Focus 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 Sprott Focus 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 Sprott Focus Trust, you can compare the effects of market volatilities on Harding Loevner and Sprott Focus 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 Sprott Focus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harding Loevner and Sprott Focus.
Diversification Opportunities for Harding Loevner and Sprott Focus
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Harding and Sprott is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Harding Loevner Institutional and Sprott Focus Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sprott Focus Trust 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 Sprott Focus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sprott Focus Trust has no effect on the direction of Harding Loevner i.e., Harding Loevner and Sprott Focus go up and down completely randomly.
Pair Corralation between Harding Loevner and Sprott Focus
Assuming the 90 days horizon Harding Loevner Institutional is expected to generate 0.8 times more return on investment than Sprott Focus. However, Harding Loevner Institutional is 1.25 times less risky than Sprott Focus. It trades about 0.13 of its potential returns per unit of risk. Sprott Focus Trust is currently generating about 0.05 per unit of risk. If you would invest 1,951 in Harding Loevner Institutional on August 28, 2025 and sell it today you would earn a total of 113.00 from holding Harding Loevner Institutional or generate 5.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harding Loevner Institutional vs. Sprott Focus Trust
Performance |
| Timeline |
| Harding Loevner Inst |
| Sprott Focus Trust |
Risk-Adjusted Performance
Soft
Weak | Strong |
Harding Loevner and Sprott Focus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harding Loevner and Sprott Focus
The main advantage of trading using opposite Harding Loevner and Sprott Focus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harding Loevner position performs unexpectedly, Sprott Focus 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 Sprott Focus will offset losses from the drop in Sprott Focus' long position.| Harding Loevner vs. Eip Growth And | Harding Loevner vs. Qs Defensive Growth | Harding Loevner vs. Chase Growth Fund | Harding Loevner vs. Slow Capital Growth |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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