Correlation Between Empiric 2500 and Federated Hermes
Can any of the company-specific risk be diversified away by investing in both Empiric 2500 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 Empiric 2500 and Federated Hermes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Empiric 2500 Fund and Federated Hermes Conservative, you can compare the effects of market volatilities on Empiric 2500 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 Empiric 2500 with a short position of Federated Hermes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Empiric 2500 and Federated Hermes.
Diversification Opportunities for Empiric 2500 and Federated Hermes
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Empiric and Federated is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Empiric 2500 Fund 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 Empiric 2500 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 Empiric 2500 Fund 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 Empiric 2500 i.e., Empiric 2500 and Federated Hermes go up and down completely randomly.
Pair Corralation between Empiric 2500 and Federated Hermes
Assuming the 90 days horizon Empiric 2500 Fund is expected to under-perform the Federated Hermes. In addition to that, Empiric 2500 is 8.66 times more volatile than Federated Hermes Conservative. It trades about -0.15 of its total potential returns per unit of risk. Federated Hermes Conservative is currently generating about 0.19 per unit of volatility. If you would invest 998.00 in Federated Hermes Conservative on December 1, 2024 and sell it today you would earn a total of 4.00 from holding Federated Hermes Conservative or generate 0.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Empiric 2500 Fund vs. Federated Hermes Conservative
Performance |
| Timeline |
| Empiric 2500 |
| Federated Hermes Con |
Empiric 2500 and Federated Hermes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Empiric 2500 and Federated Hermes
The main advantage of trading using opposite Empiric 2500 and Federated Hermes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Empiric 2500 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.| Empiric 2500 vs. Ab Small Cap | Empiric 2500 vs. Ab Small Cap | Empiric 2500 vs. Glg Intl Small | Empiric 2500 vs. Nuveen Small Cap |
| Federated Hermes vs. Gmo High Yield | Federated Hermes vs. Buffalo High Yield | Federated Hermes vs. Prudential High Yield | Federated Hermes vs. Multi Manager 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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