Correlation Between Federated Hermes and Massmutual Select
Can any of the company-specific risk be diversified away by investing in both Federated Hermes and Massmutual Select 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 Massmutual Select 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 Massmutual Select Small, you can compare the effects of market volatilities on Federated Hermes and Massmutual Select 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 Massmutual Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Hermes and Massmutual Select.
Diversification Opportunities for Federated Hermes and Massmutual Select
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Federated and Massmutual is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Federated Hermes Conservative and Massmutual Select Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Select Small 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 Massmutual Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Massmutual Select Small has no effect on the direction of Federated Hermes i.e., Federated Hermes and Massmutual Select go up and down completely randomly.
Pair Corralation between Federated Hermes and Massmutual Select
Assuming the 90 days horizon Federated Hermes is expected to generate 24.17 times less return on investment than Massmutual Select. But when comparing it to its historical volatility, Federated Hermes Conservative is 18.76 times less risky than Massmutual Select. It trades about 0.1 of its potential returns per unit of risk. Massmutual Select Small is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 968.00 in Massmutual Select Small on November 3, 2024 and sell it today you would earn a total of 23.00 from holding Massmutual Select Small or generate 2.38% 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. Massmutual Select Small
Performance |
| Timeline |
| Federated Hermes Con |
| Massmutual Select Small |
Federated Hermes and Massmutual Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Hermes and Massmutual Select
The main advantage of trading using opposite Federated Hermes and Massmutual Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Hermes position performs unexpectedly, Massmutual Select 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 Massmutual Select will offset losses from the drop in Massmutual Select's long position.| Federated Hermes vs. Neuberger Berman Real | Federated Hermes vs. Columbia Real Estate | Federated Hermes vs. Dunham Real Estate | Federated Hermes vs. Fidelity Real Estate |
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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