Correlation Between Federated Hermes and Sound Shore
Can any of the company-specific risk be diversified away by investing in both Federated Hermes and Sound Shore 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 Sound Shore 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 Sound Shore Fund, you can compare the effects of market volatilities on Federated Hermes and Sound Shore 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 Sound Shore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Hermes and Sound Shore.
Diversification Opportunities for Federated Hermes and Sound Shore
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Federated and Sound is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Federated Hermes Conservative and Sound Shore Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sound Shore Fund 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 Sound Shore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sound Shore Fund has no effect on the direction of Federated Hermes i.e., Federated Hermes and Sound Shore go up and down completely randomly.
Pair Corralation between Federated Hermes and Sound Shore
If you would invest 4,706 in Sound Shore Fund on September 3, 2024 and sell it today you would earn a total of 324.00 from holding Sound Shore Fund or generate 6.88% 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. Sound Shore Fund
Performance |
| Timeline |
| Federated Hermes Con |
| Sound Shore Fund |
Federated Hermes and Sound Shore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Hermes and Sound Shore
The main advantage of trading using opposite Federated Hermes and Sound Shore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Hermes position performs unexpectedly, Sound Shore 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 Sound Shore will offset losses from the drop in Sound Shore's long position.| Federated Hermes vs. Alpine High Yield | Federated Hermes vs. Ppm High Yield | Federated Hermes vs. American Century High | Federated Hermes vs. Pgim High Yield |
| Sound Shore vs. Dreyfusstandish Global Fixed | Sound Shore vs. Legg Mason Global | Sound Shore vs. Dreyfusstandish Global Fixed | Sound Shore vs. Ab Global Real |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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