Correlation Between Federated Hermes and Kopernik International
Can any of the company-specific risk be diversified away by investing in both Federated Hermes and Kopernik International 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 Kopernik International 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 Kopernik International, you can compare the effects of market volatilities on Federated Hermes and Kopernik International 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 Kopernik International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Hermes and Kopernik International.
Diversification Opportunities for Federated Hermes and Kopernik International
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Federated and Kopernik is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Federated Hermes Inflation and Kopernik International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kopernik International 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 Kopernik International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kopernik International has no effect on the direction of Federated Hermes i.e., Federated Hermes and Kopernik International go up and down completely randomly.
Pair Corralation between Federated Hermes and Kopernik International
Assuming the 90 days horizon Federated Hermes is expected to generate 1.18 times less return on investment than Kopernik International. But when comparing it to its historical volatility, Federated Hermes Inflation is 1.81 times less risky than Kopernik International. It trades about 0.02 of its potential returns per unit of risk. Kopernik International is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,327 in Kopernik International on August 30, 2024 and sell it today you would earn a total of 58.00 from holding Kopernik International or generate 4.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Hermes Inflation vs. Kopernik International
Performance |
| Timeline |
| Federated Hermes Inf |
| Kopernik International |
Federated Hermes and Kopernik International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Hermes and Kopernik International
The main advantage of trading using opposite Federated Hermes and Kopernik International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Hermes position performs unexpectedly, Kopernik International 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 Kopernik International will offset losses from the drop in Kopernik International's long position.| Federated Hermes vs. Barings Active Short | Federated Hermes vs. Ab Select Longshort | Federated Hermes vs. Quantitative Longshort Equity | Federated Hermes vs. Vanguard Short Term Federal |
| Kopernik International vs. Kopernik Global All Cap | Kopernik International vs. Kopernik Global All Cap | Kopernik International vs. Kopernik International Fund | Kopernik International vs. Sp 500 Equal |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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