Correlation Between Federated Hermes and Bright Rock
Can any of the company-specific risk be diversified away by investing in both Federated Hermes and Bright Rock 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 Federated Hermes and Bright Rock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Hermes Conservative and Bright Rock Mid, you can compare the effects of market volatilities on Federated Hermes and Bright Rock 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 Federated Hermes with a short position of Bright Rock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Hermes and Bright Rock.
Diversification Opportunities for Federated Hermes and Bright Rock
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Federated and Bright is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Federated Hermes Conservative and Bright Rock Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bright Rock Mid and Federated Hermes 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 Federated Hermes Conservative are associated (or correlated) with Bright Rock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bright Rock Mid has no effect on the direction of Federated Hermes i.e., Federated Hermes and Bright Rock go up and down completely randomly.
Pair Corralation between Federated Hermes and Bright Rock
If you would invest 2,574 in Bright Rock Mid on September 1, 2024 and sell it today you would earn a total of 182.00 from holding Bright Rock Mid or generate 7.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Federated Hermes Conservative vs. Bright Rock Mid
Performance |
| Timeline |
| Federated Hermes Con |
| Bright Rock Mid |
Federated Hermes and Bright Rock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Hermes and Bright Rock
The main advantage of trading using opposite Federated Hermes and Bright Rock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Hermes position performs unexpectedly, Bright Rock 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 Bright Rock will offset losses from the drop in Bright Rock's long position.| Federated Hermes vs. T Rowe Price | Federated Hermes vs. Artisan High Income | Federated Hermes vs. Legg Mason Partners | Federated Hermes vs. Morningstar Aggressive Growth |
| Bright Rock vs. Quantitative Longshort Equity | Bright Rock vs. Old Westbury Short Term | Bright Rock vs. Franklin Federal Limited Term | Bright Rock vs. Aqr Sustainable Long Short |
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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