Correlation Between Federated Hermes and Pacific Funds
Can any of the company-specific risk be diversified away by investing in both Federated Hermes and Pacific Funds 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 Pacific Funds 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 Pacific Funds Short, you can compare the effects of market volatilities on Federated Hermes and Pacific Funds 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 Pacific Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Hermes and Pacific Funds.
Diversification Opportunities for Federated Hermes and Pacific Funds
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Federated and Pacific is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Federated Hermes Conservative and Pacific Funds Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacific Funds Short 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 Pacific Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacific Funds Short has no effect on the direction of Federated Hermes i.e., Federated Hermes and Pacific Funds go up and down completely randomly.
Pair Corralation between Federated Hermes and Pacific Funds
Assuming the 90 days horizon Federated Hermes Conservative is expected to generate 0.92 times more return on investment than Pacific Funds. However, Federated Hermes Conservative is 1.08 times less risky than Pacific Funds. It trades about 0.22 of its potential returns per unit of risk. Pacific Funds Short is currently generating about 0.17 per unit of risk. If you would invest 950.00 in Federated Hermes Conservative on December 2, 2024 and sell it today you would earn a total of 52.00 from holding Federated Hermes Conservative or generate 5.47% 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. Pacific Funds Short
Performance |
| Timeline |
| Federated Hermes Con |
| Pacific Funds Short |
Federated Hermes and Pacific Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Hermes and Pacific Funds
The main advantage of trading using opposite Federated Hermes and Pacific Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Hermes position performs unexpectedly, Pacific Funds 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 Pacific Funds will offset losses from the drop in Pacific Funds' long position.| Federated Hermes vs. T Rowe Price | Federated Hermes vs. T Rowe Price | Federated Hermes vs. T Rowe Price | Federated Hermes vs. Transamerica Financial Life |
| Pacific Funds vs. Intal High Relative | Pacific Funds vs. Versatile Bond Portfolio | Pacific Funds vs. Ft 7934 Corporate | Pacific Funds vs. Rbc Emerging Markets |
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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