Correlation Between Ab Bond and Federated Hermes
Can any of the company-specific risk be diversified away by investing in both Ab Bond and Federated Hermes 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 Ab Bond and Federated Hermes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Bond Inflation and Federated Hermes Inflation, you can compare the effects of market volatilities on Ab Bond and Federated Hermes 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 Ab Bond with a short position of Federated Hermes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Bond and Federated Hermes.
Diversification Opportunities for Ab Bond and Federated Hermes
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between ABNCX and Federated is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Ab Bond Inflation and Federated Hermes Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Hermes Inf and Ab Bond 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 Ab Bond Inflation are associated (or correlated) with Federated Hermes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Hermes Inf has no effect on the direction of Ab Bond i.e., Ab Bond and Federated Hermes go up and down completely randomly.
Pair Corralation between Ab Bond and Federated Hermes
Assuming the 90 days horizon Ab Bond Inflation is expected to generate 0.71 times more return on investment than Federated Hermes. However, Ab Bond Inflation is 1.4 times less risky than Federated Hermes. It trades about 0.05 of its potential returns per unit of risk. Federated Hermes Inflation is currently generating about 0.02 per unit of risk. If you would invest 940.00 in Ab Bond Inflation on August 27, 2024 and sell it today you would earn a total of 62.00 from holding Ab Bond Inflation or generate 6.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Bond Inflation vs. Federated Hermes Inflation
Performance |
| Timeline |
| Ab Bond Inflation |
| Federated Hermes Inf |
Ab Bond and Federated Hermes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Bond and Federated Hermes
The main advantage of trading using opposite Ab Bond and Federated Hermes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Bond position performs unexpectedly, Federated Hermes 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 Federated Hermes will offset losses from the drop in Federated Hermes' long position.| Ab Bond vs. Goldman Sachs Large | Ab Bond vs. Federated Mdt Large | Ab Bond vs. T Rowe Price | Ab Bond vs. Aqr Large Cap |
| Federated Hermes vs. Deutsche Health And | Federated Hermes vs. Alphacentric Lifesci Healthcare | Federated Hermes vs. Baron Health Care | Federated Hermes vs. Allianzgi Health Sciences |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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