Correlation Between Federated Hermes and Teton Westwood
Can any of the company-specific risk be diversified away by investing in both Federated Hermes and Teton Westwood 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 Teton Westwood 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 Teton Westwood Small, you can compare the effects of market volatilities on Federated Hermes and Teton Westwood 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 Teton Westwood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Hermes and Teton Westwood.
Diversification Opportunities for Federated Hermes and Teton Westwood
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Federated and Teton is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Federated Hermes Conservative and Teton Westwood Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teton Westwood 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 Teton Westwood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teton Westwood Small has no effect on the direction of Federated Hermes i.e., Federated Hermes and Teton Westwood go up and down completely randomly.
Pair Corralation between Federated Hermes and Teton Westwood
Assuming the 90 days horizon Federated Hermes is expected to generate 1.34 times less return on investment than Teton Westwood. But when comparing it to its historical volatility, Federated Hermes Conservative is 19.18 times less risky than Teton Westwood. It trades about 0.1 of its potential returns per unit of risk. Teton Westwood Small is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 2,357 in Teton Westwood Small on November 4, 2024 and sell it today you would earn a total of 1.00 from holding Teton Westwood Small or generate 0.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Hermes Conservative vs. Teton Westwood Small
Performance |
| Timeline |
| Federated Hermes Con |
| Teton Westwood Small |
Federated Hermes and Teton Westwood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Hermes and Teton Westwood
The main advantage of trading using opposite Federated Hermes and Teton Westwood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Hermes position performs unexpectedly, Teton Westwood 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 Teton Westwood will offset losses from the drop in Teton Westwood's long position.| Federated Hermes vs. Catalyst Exceed Defined | Federated Hermes vs. Artisan High Income | Federated Hermes vs. Transamerica High Yield | Federated Hermes vs. Rbc Bluebay Global |
| Teton Westwood vs. Virtus Convertible | Teton Westwood vs. Calamos Dynamic Convertible | Teton Westwood vs. Absolute Convertible Arbitrage | Teton Westwood vs. Columbia Convertible Securities |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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