Correlation Between Harding Loevner and Highland Floating

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

By analyzing existing cross correlation between Harding Loevner Frontier and Highland Floating Rate, you can compare the effects of market volatilities on Harding Loevner and Highland Floating 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 Highland Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harding Loevner and Highland Floating.

Diversification Opportunities for Harding Loevner and Highland Floating

1.0

Correlation Coefficient

Harding Loevner  Highland Floating

No risk reduction

The 3 months correlation between Harding and Highland is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Harding Loevner Frontier and Highland Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highland Floating Rate 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 Frontier are associated (or correlated) with Highland Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highland Floating Rate has no effect on the direction of Harding Loevner i.e., Harding Loevner and Highland Floating go up and down completely randomly.

Pair Corralation between Harding Loevner and Highland Floating

Assuming the 90 days horizon Harding Loevner is expected to generate 1.21 times less return on investment than Highland Floating. But when comparing it to its historical volatility, Harding Loevner Frontier is 1.04 times less risky than Highland Floating. It trades about 0.25 of its potential returns per unit of risk. Highland Floating Rate is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest  821.00  in Highland Floating Rate on May 7, 2025 and sell it today you would earn a total of  83.00  from holding Highland Floating Rate or generate 10.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Harding Loevner Frontier  vs.  Highland Floating Rate

Harding Loevner Frontier

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Harding Loevner Frontier are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Harding Loevner may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Highland Floating Rate

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Highland Floating Rate are ranked lower than 22 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Highland Floating may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Harding Loevner and Highland Floating

The main advantage of trading using opposite Harding Loevner and Highland Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harding Loevner position performs unexpectedly, Highland Floating 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 Highland Floating will offset losses from the drop in Highland Floating's long position.

The idea behind Harding Loevner Frontier and Highland Floating Rate 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..