Correlation Between Fm Investments and Harding Loevner

Can any of the company-specific risk be diversified away by investing in both Fm Investments 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 Fm Investments and Harding Loevner into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Fm Investments Large and Harding Loevner Funds, you can compare the effects of market volatilities on Fm Investments 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 Fm Investments with a short position of Harding Loevner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fm Investments and Harding Loevner.

Diversification Opportunities for Fm Investments and Harding Loevner

-0.65

Correlation Coefficient

Fm Investments  Harding Loevner

Excellent diversification

The 3 months correlation between IAFLX and Harding is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Fm Investments Large and Harding Loevner Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harding Loevner Funds and Fm Investments 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 Fm Investments Large 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 Funds has no effect on the direction of Fm Investments i.e., Fm Investments and Harding Loevner go up and down completely randomly.

Pair Corralation between Fm Investments and Harding Loevner

Assuming the 90 days horizon Fm Investments Large is expected to generate 1.45 times more return on investment than Harding Loevner. However, Fm Investments is 1.45 times more volatile than Harding Loevner Funds. It trades about 0.18 of its potential returns per unit of risk. Harding Loevner Funds is currently generating about -0.07 per unit of risk. If you would invest  1,753  in Fm Investments Large on September 13, 2024 and sell it today you would earn a total of  189.00  from holding Fm Investments Large or generate 10.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Fm Investments Large  vs.  Harding Loevner Funds

Fm Investments Large

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fm Investments Large are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak essential indicators, Fm Investments may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Harding Loevner Funds

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Harding Loevner Funds has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Harding Loevner is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Fm Investments and Harding Loevner

The main advantage of trading using opposite Fm Investments and Harding Loevner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fm Investments 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.

The idea behind Fm Investments Large and Harding Loevner Funds pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.