Correlation Between Federated Hermes and Saat Market
Can any of the company-specific risk be diversified away by investing in both Federated Hermes and Saat Market 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 Saat Market 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 Saat Market Growth, you can compare the effects of market volatilities on Federated Hermes and Saat Market 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 Saat Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Hermes and Saat Market.
Diversification Opportunities for Federated Hermes and Saat Market
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Federated and Saat is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Federated Hermes Conservative and Saat Market Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saat Market Growth 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 Saat Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saat Market Growth has no effect on the direction of Federated Hermes i.e., Federated Hermes and Saat Market go up and down completely randomly.
Pair Corralation between Federated Hermes and Saat Market
Assuming the 90 days horizon Federated Hermes is expected to generate 2.93 times less return on investment than Saat Market. But when comparing it to its historical volatility, Federated Hermes Conservative is 6.23 times less risky than Saat Market. It trades about 0.22 of its potential returns per unit of risk. Saat Market Growth is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2,569 in Saat Market Growth on September 14, 2024 and sell it today you would earn a total of 422.00 from holding Saat Market Growth or generate 16.43% 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. Saat Market Growth
Performance |
| Timeline |
| Federated Hermes Con |
| Saat Market Growth |
Federated Hermes and Saat Market Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Hermes and Saat Market
The main advantage of trading using opposite Federated Hermes and Saat Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Hermes position performs unexpectedly, Saat Market 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 Saat Market will offset losses from the drop in Saat Market's long position.The idea behind Federated Hermes Conservative and Saat Market Growth pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Saat Market vs. Simt Mid Cap | Saat Market vs. Saat Tax Managed Aggressive | Saat Market vs. Sit Emerging Markets | Saat Market vs. Simt High Yield |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |