Correlation Between Federated Hermes and Empiric 2500
Can any of the company-specific risk be diversified away by investing in both Federated Hermes and Empiric 2500 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 Empiric 2500 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 Empiric 2500 Fund, you can compare the effects of market volatilities on Federated Hermes and Empiric 2500 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 Empiric 2500. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Hermes and Empiric 2500.
Diversification Opportunities for Federated Hermes and Empiric 2500
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Federated and Empiric is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Federated Hermes Conservative and Empiric 2500 Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Empiric 2500 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 Empiric 2500. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Empiric 2500 has no effect on the direction of Federated Hermes i.e., Federated Hermes and Empiric 2500 go up and down completely randomly.
Pair Corralation between Federated Hermes and Empiric 2500
Assuming the 90 days horizon Federated Hermes is expected to generate 2.4 times less return on investment than Empiric 2500. But when comparing it to its historical volatility, Federated Hermes Conservative is 8.6 times less risky than Empiric 2500. It trades about 0.21 of its potential returns per unit of risk. Empiric 2500 Fund is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 4,329 in Empiric 2500 Fund on November 30, 2024 and sell it today you would earn a total of 1,187 from holding Empiric 2500 Fund or generate 27.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Hermes Conservative vs. Empiric 2500 Fund
Performance |
| Timeline |
| Federated Hermes Con |
| Empiric 2500 |
Federated Hermes and Empiric 2500 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Hermes and Empiric 2500
The main advantage of trading using opposite Federated Hermes and Empiric 2500 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Hermes position performs unexpectedly, Empiric 2500 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 Empiric 2500 will offset losses from the drop in Empiric 2500's long position.| 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 |
| Empiric 2500 vs. Morningstar Defensive Bond | Empiric 2500 vs. Intermediate Bond Fund | Empiric 2500 vs. Jhvit Core Bond | Empiric 2500 vs. Praxis Impact Bond |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |