Correlation Between Federated Hermes and Gmo International
Can any of the company-specific risk be diversified away by investing in both Federated Hermes and Gmo International 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 Gmo International 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 Gmo International Equity, you can compare the effects of market volatilities on Federated Hermes and Gmo International 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 Gmo International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Hermes and Gmo International.
Diversification Opportunities for Federated Hermes and Gmo International
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Federated and Gmo is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Federated Hermes Conservative and Gmo International Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gmo International Equity 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 Gmo International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gmo International Equity has no effect on the direction of Federated Hermes i.e., Federated Hermes and Gmo International go up and down completely randomly.
Pair Corralation between Federated Hermes and Gmo International
If you would invest 2,906 in Gmo International Equity on September 13, 2024 and sell it today you would earn a total of 60.00 from holding Gmo International Equity or generate 2.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Hermes Conservative vs. Gmo International Equity
Performance |
| Timeline |
| Federated Hermes Con |
| Gmo International Equity |
Federated Hermes and Gmo International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Hermes and Gmo International
The main advantage of trading using opposite Federated Hermes and Gmo International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Hermes position performs unexpectedly, Gmo International 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 Gmo International will offset losses from the drop in Gmo International's long position.| Federated Hermes vs. Federated Emerging Market | Federated Hermes vs. Federated Mdt All | Federated Hermes vs. Federated Mdt Balanced | Federated Hermes vs. Federated Global Allocation |
| Gmo International vs. Gmo E Plus | Gmo International vs. Gmo Trust | Gmo International vs. Gmo Small Cap | Gmo International vs. Gmo International Opportunistic |
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.
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