Correlation Between Balanced Strategy and Harding Loevner
Can any of the company-specific risk be diversified away by investing in both Balanced Strategy 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 Balanced Strategy and Harding Loevner into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Balanced Strategy Fund and Harding Loevner Emerging, you can compare the effects of market volatilities on Balanced Strategy 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 Balanced Strategy with a short position of Harding Loevner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Balanced Strategy and Harding Loevner.
Diversification Opportunities for Balanced Strategy and Harding Loevner
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Balanced and Harding is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Balanced Strategy Fund 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 Balanced Strategy 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 Balanced Strategy Fund 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 Balanced Strategy i.e., Balanced Strategy and Harding Loevner go up and down completely randomly.
Pair Corralation between Balanced Strategy and Harding Loevner
Assuming the 90 days horizon Balanced Strategy is expected to generate 1.78 times less return on investment than Harding Loevner. But when comparing it to its historical volatility, Balanced Strategy Fund is 1.61 times less risky than Harding Loevner. It trades about 0.15 of its potential returns per unit of risk. Harding Loevner Emerging is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 4,206 in Harding Loevner Emerging on September 3, 2025 and sell it today you would earn a total of 320.00 from holding Harding Loevner Emerging or generate 7.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Balanced Strategy Fund vs. Harding Loevner Emerging
Performance |
| Timeline |
| Balanced Strategy |
| Harding Loevner Emerging |
Balanced Strategy and Harding Loevner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Balanced Strategy and Harding Loevner
The main advantage of trading using opposite Balanced Strategy and Harding Loevner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Balanced Strategy 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.| Balanced Strategy vs. Qs Small Capitalization | Balanced Strategy vs. Aqr Small Cap | Balanced Strategy vs. Artisan Small Cap | Balanced Strategy vs. Federated Mdt Small |
| Harding Loevner vs. Diversified Bond Fund | Harding Loevner vs. Fulcrum Diversified Absolute | Harding Loevner vs. Mfs Diversified Income | Harding Loevner vs. Manning Napier Diversified |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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