Correlation Between Federated Hermes and Guidestone Value
Can any of the company-specific risk be diversified away by investing in both Federated Hermes and Guidestone Value 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 Guidestone Value 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 Guidestone Value Equity, you can compare the effects of market volatilities on Federated Hermes and Guidestone Value 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 Guidestone Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Hermes and Guidestone Value.
Diversification Opportunities for Federated Hermes and Guidestone Value
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Federated and Guidestone is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Federated Hermes Inflation and Guidestone Value Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guidestone Value Equity 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 Guidestone Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guidestone Value Equity has no effect on the direction of Federated Hermes i.e., Federated Hermes and Guidestone Value go up and down completely randomly.
Pair Corralation between Federated Hermes and Guidestone Value
Assuming the 90 days horizon Federated Hermes is expected to generate 3.83 times less return on investment than Guidestone Value. But when comparing it to its historical volatility, Federated Hermes Inflation is 1.98 times less risky than Guidestone Value. It trades about 0.03 of its potential returns per unit of risk. Guidestone Value Equity is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 989.00 in Guidestone Value Equity on September 12, 2024 and sell it today you would earn a total of 237.00 from holding Guidestone Value Equity or generate 23.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Federated Hermes Inflation vs. Guidestone Value Equity
Performance |
| Timeline |
| Federated Hermes Inf |
| Guidestone Value Equity |
Federated Hermes and Guidestone Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Hermes and Guidestone Value
The main advantage of trading using opposite Federated Hermes and Guidestone Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Hermes position performs unexpectedly, Guidestone Value 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 Guidestone Value will offset losses from the drop in Guidestone Value's long position.| Federated Hermes vs. Ab Bond Inflation | Federated Hermes vs. Blackrock Inflation Protected | Federated Hermes vs. Arrow Managed Futures | Federated Hermes vs. Lord Abbett Inflation |
| Guidestone Value vs. Deutsche Global Inflation | Guidestone Value vs. Ab Bond Inflation | Guidestone Value vs. Federated Hermes Inflation | Guidestone Value 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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