Correlation Between Morningstar Global and Harding Loevner

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

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

Diversification Opportunities for Morningstar Global and Harding Loevner

0.95

Correlation Coefficient

Morningstar Global  Harding Loevner

Almost no diversification

The 3 months correlation between Morningstar and Harding is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Morningstar Global Income and Harding Loevner Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harding Loevner Global and Morningstar Global 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 Morningstar Global Income 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 Global has no effect on the direction of Morningstar Global i.e., Morningstar Global and Harding Loevner go up and down completely randomly.

Pair Corralation between Morningstar Global and Harding Loevner

Assuming the 90 days horizon Morningstar Global is expected to generate 1.62 times less return on investment than Harding Loevner. But when comparing it to its historical volatility, Morningstar Global Income is 1.89 times less risky than Harding Loevner. It trades about 0.18 of its potential returns per unit of risk. Harding Loevner Global is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  3,418  in Harding Loevner Global on May 6, 2025 and sell it today you would earn a total of  224.00  from holding Harding Loevner Global or generate 6.55% return on investment over 90 days.

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

Morningstar Global Income  vs.  Harding Loevner Global

Morningstar Global Income

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Morningstar Global Income are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Morningstar Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Harding Loevner Global

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Harding Loevner Global are ranked lower than 12 (%) 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.

Pair Trading with Morningstar Global and Harding Loevner

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

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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.