Correlation Between Federated Hermes and Franklin Adjustable
Can any of the company-specific risk be diversified away by investing in both Federated Hermes and Franklin Adjustable 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 Franklin Adjustable 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 Franklin Adjustable Government, you can compare the effects of market volatilities on Federated Hermes and Franklin Adjustable 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 Franklin Adjustable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Hermes and Franklin Adjustable.
Diversification Opportunities for Federated Hermes and Franklin Adjustable
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Federated and Franklin is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Federated Hermes Conservative and Franklin Adjustable Government in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Adjustable 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 Franklin Adjustable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Adjustable has no effect on the direction of Federated Hermes i.e., Federated Hermes and Franklin Adjustable go up and down completely randomly.
Pair Corralation between Federated Hermes and Franklin Adjustable
Assuming the 90 days horizon Federated Hermes Conservative is expected to generate 0.9 times more return on investment than Franklin Adjustable. However, Federated Hermes Conservative is 1.11 times less risky than Franklin Adjustable. It trades about 0.22 of its potential returns per unit of risk. Franklin Adjustable Government is currently generating about 0.18 per unit of risk. If you would invest 921.00 in Federated Hermes Conservative on September 19, 2024 and sell it today you would earn a total of 80.00 from holding Federated Hermes Conservative or generate 8.69% 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. Franklin Adjustable Government
Performance |
| Timeline |
| Federated Hermes Con |
| Franklin Adjustable |
Federated Hermes and Franklin Adjustable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Hermes and Franklin Adjustable
The main advantage of trading using opposite Federated Hermes and Franklin Adjustable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Hermes position performs unexpectedly, Franklin Adjustable 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 Franklin Adjustable will offset losses from the drop in Franklin Adjustable's long position.| Federated Hermes vs. Gabelli Convertible And | Federated Hermes vs. Advent Claymore Convertible | Federated Hermes vs. Virtus Convertible | Federated Hermes vs. Fidelity Sai Convertible |
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 Channel module to use Commodity Channel Index to analyze current equity momentum.
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