Correlation Between Federated Hermes and Omni Small-cap
Can any of the company-specific risk be diversified away by investing in both Federated Hermes and Omni Small-cap 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 Omni Small-cap 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 Omni Small Cap Value, you can compare the effects of market volatilities on Federated Hermes and Omni Small-cap 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 Omni Small-cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Hermes and Omni Small-cap.
Diversification Opportunities for Federated Hermes and Omni Small-cap
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Federated and Omni is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Federated Hermes Inflation and Omni Small Cap Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Omni Small Cap 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 Omni Small-cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Omni Small Cap has no effect on the direction of Federated Hermes i.e., Federated Hermes and Omni Small-cap go up and down completely randomly.
Pair Corralation between Federated Hermes and Omni Small-cap
Assuming the 90 days horizon Federated Hermes Inflation is expected to generate 0.18 times more return on investment than Omni Small-cap. However, Federated Hermes Inflation is 5.63 times less risky than Omni Small-cap. It trades about -0.18 of its potential returns per unit of risk. Omni Small Cap Value is currently generating about -0.1 per unit of risk. If you would invest 996.00 in Federated Hermes Inflation on October 14, 2024 and sell it today you would lose (32.00) from holding Federated Hermes Inflation or give up 3.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Hermes Inflation vs. Omni Small Cap Value
Performance |
| Timeline |
| Federated Hermes Inf |
| Omni Small Cap |
Federated Hermes and Omni Small-cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Hermes and Omni Small-cap
The main advantage of trading using opposite Federated Hermes and Omni Small-cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Hermes position performs unexpectedly, Omni Small-cap 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 Omni Small-cap will offset losses from the drop in Omni Small-cap's long position.| Federated Hermes vs. Siit High Yield | Federated Hermes vs. Pace High Yield | Federated Hermes vs. Tiaa Cref High Yield Fund | Federated Hermes vs. Voya High Yield |
| Omni Small-cap vs. Invesco Vertible Securities | Omni Small-cap vs. Allianzgi Convertible Income | Omni Small-cap vs. Lord Abbett Vertible | Omni Small-cap vs. Mainstay Vertible 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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