Correlation Between Federated Hermes and Icon Financial
Can any of the company-specific risk be diversified away by investing in both Federated Hermes and Icon Financial 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 Icon Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Hermes Sdg and Icon Financial Fund, you can compare the effects of market volatilities on Federated Hermes and Icon Financial 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 Icon Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Hermes and Icon Financial.
Diversification Opportunities for Federated Hermes and Icon Financial
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Federated and Icon is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Federated Hermes Sdg and Icon Financial Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icon Financial 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 Sdg are associated (or correlated) with Icon Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Icon Financial has no effect on the direction of Federated Hermes i.e., Federated Hermes and Icon Financial go up and down completely randomly.
Pair Corralation between Federated Hermes and Icon Financial
Assuming the 90 days horizon Federated Hermes Sdg is expected to generate 0.89 times more return on investment than Icon Financial. However, Federated Hermes Sdg is 1.12 times less risky than Icon Financial. It trades about 0.15 of its potential returns per unit of risk. Icon Financial Fund is currently generating about 0.02 per unit of risk. If you would invest 1,368 in Federated Hermes Sdg on October 25, 2024 and sell it today you would earn a total of 26.00 from holding Federated Hermes Sdg or generate 1.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Hermes Sdg vs. Icon Financial Fund
Performance |
| Timeline |
| Federated Hermes Sdg |
| Icon Financial |
Federated Hermes and Icon Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Hermes and Icon Financial
The main advantage of trading using opposite Federated Hermes and Icon Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Hermes position performs unexpectedly, Icon Financial 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 Icon Financial will offset losses from the drop in Icon Financial's long position.| Federated Hermes vs. Franklin Government Money | Federated Hermes vs. Dws Government Money | Federated Hermes vs. Versatile Bond Portfolio | Federated Hermes vs. Bbh Intermediate Municipal |
| Icon Financial vs. Vanguard Money Market | Icon Financial vs. Aig Government Money | Icon Financial vs. Blackrock Exchange Portfolio | Icon Financial vs. Putnam Money Market |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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