Correlation Between Centre American and Federated Hermes
Can any of the company-specific risk be diversified away by investing in both Centre American 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 Centre American and Federated Hermes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centre American Select and Federated Hermes Conservative, you can compare the effects of market volatilities on Centre American 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 Centre American with a short position of Federated Hermes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centre American and Federated Hermes.
Diversification Opportunities for Centre American and Federated Hermes
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Centre and Federated is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Centre American Select and Federated Hermes Conservative in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Hermes Con and Centre American 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 Centre American Select 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 Con has no effect on the direction of Centre American i.e., Centre American and Federated Hermes go up and down completely randomly.
Pair Corralation between Centre American and Federated Hermes
Assuming the 90 days horizon Centre American Select is expected to generate 7.08 times more return on investment than Federated Hermes. However, Centre American is 7.08 times more volatile than Federated Hermes Conservative. It trades about 0.08 of its potential returns per unit of risk. Federated Hermes Conservative is currently generating about 0.22 per unit of risk. If you would invest 1,422 in Centre American Select on September 3, 2024 and sell it today you would earn a total of 403.00 from holding Centre American Select or generate 28.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Centre American Select vs. Federated Hermes Conservative
Performance |
| Timeline |
| Centre American Select |
| Federated Hermes Con |
Centre American and Federated Hermes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centre American and Federated Hermes
The main advantage of trading using opposite Centre American and Federated Hermes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centre American 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.| Centre American vs. The Fixed Income | Centre American vs. Rbc Global Equity | Centre American vs. Artisan Select Equity | Centre American vs. Multimedia Portfolio Multimedia |
| Federated Hermes vs. Alpine High Yield | Federated Hermes vs. Ppm High Yield | Federated Hermes vs. American Century High | Federated Hermes vs. Pgim High Yield |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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