Correlation Between Ab High and Federated Hermes
Can any of the company-specific risk be diversified away by investing in both Ab High 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 High 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 High Income and Federated Hermes Ultrashort, you can compare the effects of market volatilities on Ab High 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 High with a short position of Federated Hermes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab High and Federated Hermes.
Diversification Opportunities for Ab High and Federated Hermes
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AGDAX and Federated is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Ab High Income and Federated Hermes Ultrashort in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Hermes Ult and Ab High 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 High Income 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 Ult has no effect on the direction of Ab High i.e., Ab High and Federated Hermes go up and down completely randomly.
Pair Corralation between Ab High and Federated Hermes
Assuming the 90 days horizon Ab High Income is expected to generate 1.84 times more return on investment than Federated Hermes. However, Ab High is 1.84 times more volatile than Federated Hermes Ultrashort. It trades about 0.23 of its potential returns per unit of risk. Federated Hermes Ultrashort is currently generating about 0.22 per unit of risk. If you would invest 701.00 in Ab High Income on September 12, 2024 and sell it today you would earn a total of 7.00 from holding Ab High Income or generate 1.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Ab High Income vs. Federated Hermes Ultrashort
Performance |
| Timeline |
| Ab High Income |
| Federated Hermes Ult |
Ab High and Federated Hermes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab High and Federated Hermes
The main advantage of trading using opposite Ab High and Federated Hermes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab High 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 High vs. SCOR PK | Ab High vs. Morningstar Unconstrained Allocation | Ab High vs. Via Renewables | Ab High vs. Bondbloxx ETF Trust |
| Federated Hermes vs. Ab Global Risk | Federated Hermes vs. Morningstar Aggressive Growth | Federated Hermes vs. Pace High Yield | Federated Hermes vs. Ab High Income |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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