Correlation Between Federated Hermes and Dreyfus Gnma
Can any of the company-specific risk be diversified away by investing in both Federated Hermes and Dreyfus Gnma 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 Dreyfus Gnma 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 Dreyfus Gnma Fund, you can compare the effects of market volatilities on Federated Hermes and Dreyfus Gnma 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 Dreyfus Gnma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Hermes and Dreyfus Gnma.
Diversification Opportunities for Federated Hermes and Dreyfus Gnma
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Federated and Dreyfus is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Federated Hermes Inflation and Dreyfus Gnma Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Gnma 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 Dreyfus Gnma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Gnma has no effect on the direction of Federated Hermes i.e., Federated Hermes and Dreyfus Gnma go up and down completely randomly.
Pair Corralation between Federated Hermes and Dreyfus Gnma
Assuming the 90 days horizon Federated Hermes Inflation is expected to generate 0.69 times more return on investment than Dreyfus Gnma. However, Federated Hermes Inflation is 1.45 times less risky than Dreyfus Gnma. It trades about 0.19 of its potential returns per unit of risk. Dreyfus Gnma Fund is currently generating about 0.03 per unit of risk. If you would invest 980.00 in Federated Hermes Inflation on September 14, 2024 and sell it today you would earn a total of 8.00 from holding Federated Hermes Inflation or generate 0.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Hermes Inflation vs. Dreyfus Gnma Fund
Performance |
| Timeline |
| Federated Hermes Inf |
| Dreyfus Gnma |
Federated Hermes and Dreyfus Gnma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Hermes and Dreyfus Gnma
The main advantage of trading using opposite Federated Hermes and Dreyfus Gnma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Hermes position performs unexpectedly, Dreyfus Gnma 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 Dreyfus Gnma will offset losses from the drop in Dreyfus Gnma's long position.| Federated Hermes vs. Commodities Strategy Fund | Federated Hermes vs. Eic Value Fund | Federated Hermes vs. T Rowe Price | Federated Hermes vs. Rbb Fund |
| Dreyfus Gnma vs. Ab Bond Inflation | Dreyfus Gnma vs. Federated Hermes Inflation | Dreyfus Gnma vs. Simt Multi Asset Inflation | Dreyfus Gnma vs. Schwab Treasury Inflation |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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