Correlation Between Federated Hermes and Regional Bank
Can any of the company-specific risk be diversified away by investing in both Federated Hermes and Regional Bank 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 Regional Bank 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 Regional Bank Fund, you can compare the effects of market volatilities on Federated Hermes and Regional Bank 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 Regional Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Hermes and Regional Bank.
Diversification Opportunities for Federated Hermes and Regional Bank
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Federated and Regional is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Federated Hermes Conservative and Regional Bank Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regional Bank 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 Regional Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regional Bank has no effect on the direction of Federated Hermes i.e., Federated Hermes and Regional Bank go up and down completely randomly.
Pair Corralation between Federated Hermes and Regional Bank
If you would invest 1,001 in Federated Hermes Conservative on September 18, 2024 and sell it today you would earn a total of 0.00 from holding Federated Hermes Conservative or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Hermes Conservative vs. Regional Bank Fund
Performance |
| Timeline |
| Federated Hermes Con |
| Regional Bank |
Federated Hermes and Regional Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Hermes and Regional Bank
The main advantage of trading using opposite Federated Hermes and Regional Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Hermes position performs unexpectedly, Regional Bank 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 Regional Bank will offset losses from the drop in Regional Bank's long position.| Federated Hermes vs. Commonwealth Global Fund | Federated Hermes vs. Commodities Strategy Fund | Federated Hermes vs. Qs Growth Fund | Federated Hermes vs. Volumetric Fund Volumetric |
| Regional Bank vs. Fulcrum Diversified Absolute | Regional Bank vs. Lord Abbett Diversified | Regional Bank vs. Jpmorgan Diversified Fund | Regional Bank vs. Federated Hermes Conservative |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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