Correlation Between Federated Hermes and Western Asset
Can any of the company-specific risk be diversified away by investing in both Federated Hermes and Western Asset 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 Western Asset 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 Western Asset Inflation, you can compare the effects of market volatilities on Federated Hermes and Western Asset 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 Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Hermes and Western Asset.
Diversification Opportunities for Federated Hermes and Western Asset
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Federated and WESTERN is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Federated Hermes Inflation and Western Asset Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Inflation 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 Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Inflation has no effect on the direction of Federated Hermes i.e., Federated Hermes and Western Asset go up and down completely randomly.
Pair Corralation between Federated Hermes and Western Asset
Assuming the 90 days horizon Federated Hermes Inflation is expected to generate 0.85 times more return on investment than Western Asset. However, Federated Hermes Inflation is 1.17 times less risky than Western Asset. It trades about -0.04 of its potential returns per unit of risk. Western Asset Inflation is currently generating about -0.07 per unit of risk. If you would invest 985.00 in Federated Hermes Inflation on August 27, 2024 and sell it today you would lose (2.00) from holding Federated Hermes Inflation or give up 0.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Hermes Inflation vs. Western Asset Inflation
Performance |
| Timeline |
| Federated Hermes Inf |
| Western Asset Inflation |
Federated Hermes and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Hermes and Western Asset
The main advantage of trading using opposite Federated Hermes and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Hermes position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's long position.| Federated Hermes vs. Deutsche Health And | Federated Hermes vs. Alphacentric Lifesci Healthcare | Federated Hermes vs. Baron Health Care | Federated Hermes vs. Allianzgi Health Sciences |
| Western Asset vs. Invesco Technology Fund | Western Asset vs. Mfs Technology Fund | Western Asset vs. Hennessy Technology Fund | Western Asset vs. Columbia Global Technology |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |