Correlation Between Federated Hermes and Strategic Allocation
Can any of the company-specific risk be diversified away by investing in both Federated Hermes and Strategic Allocation 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 Strategic Allocation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Hermes Inflation and Strategic Allocation Aggressive, you can compare the effects of market volatilities on Federated Hermes and Strategic Allocation 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 Strategic Allocation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Hermes and Strategic Allocation.
Diversification Opportunities for Federated Hermes and Strategic Allocation
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Federated and Strategic is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Federated Hermes Inflation and Strategic Allocation Aggressiv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Allocation 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 Inflation are associated (or correlated) with Strategic Allocation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Allocation has no effect on the direction of Federated Hermes i.e., Federated Hermes and Strategic Allocation go up and down completely randomly.
Pair Corralation between Federated Hermes and Strategic Allocation
Assuming the 90 days horizon Federated Hermes Inflation is expected to under-perform the Strategic Allocation. But the mutual fund apears to be less risky and, when comparing its historical volatility, Federated Hermes Inflation is 1.93 times less risky than Strategic Allocation. The mutual fund trades about -0.04 of its potential returns per unit of risk. The Strategic Allocation Aggressive is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 862.00 in Strategic Allocation Aggressive on September 13, 2024 and sell it today you would earn a total of 16.00 from holding Strategic Allocation Aggressive or generate 1.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.67% |
| Values | Daily Returns |
Federated Hermes Inflation vs. Strategic Allocation Aggressiv
Performance |
| Timeline |
| Federated Hermes Inf |
| Strategic Allocation |
Federated Hermes and Strategic Allocation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Hermes and Strategic Allocation
The main advantage of trading using opposite Federated Hermes and Strategic Allocation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Hermes position performs unexpectedly, Strategic Allocation 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 Strategic Allocation will offset losses from the drop in Strategic Allocation's long position.| Federated Hermes vs. Gabelli Convertible And | Federated Hermes vs. Putnam Convertible Incm Gwth | Federated Hermes vs. Allianzgi Convertible Income | Federated Hermes vs. Rationalpier 88 Convertible |
| Strategic Allocation vs. Mid Cap Value | Strategic Allocation vs. Equity Growth Fund | Strategic Allocation vs. Income Growth Fund | Strategic Allocation vs. Diversified Bond Fund |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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