Correlation Between Franklin Adjustable and Federated Hermes
Can any of the company-specific risk be diversified away by investing in both Franklin Adjustable and Federated Hermes 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 Franklin Adjustable and Federated Hermes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Adjustable Government and Federated Hermes Sdg, you can compare the effects of market volatilities on Franklin Adjustable and Federated Hermes 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 Franklin Adjustable with a short position of Federated Hermes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Adjustable and Federated Hermes.
Diversification Opportunities for Franklin Adjustable and Federated Hermes
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between FRANKLIN and Federated is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Adjustable Government and Federated Hermes Sdg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Hermes Sdg and Franklin Adjustable 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 Franklin Adjustable Government are associated (or correlated) with Federated Hermes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Hermes Sdg has no effect on the direction of Franklin Adjustable i.e., Franklin Adjustable and Federated Hermes go up and down completely randomly.
Pair Corralation between Franklin Adjustable and Federated Hermes
Assuming the 90 days horizon Franklin Adjustable is expected to generate 2.82 times less return on investment than Federated Hermes. But when comparing it to its historical volatility, Franklin Adjustable Government is 7.71 times less risky than Federated Hermes. It trades about 0.14 of its potential returns per unit of risk. Federated Hermes Sdg is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,181 in Federated Hermes Sdg on September 1, 2024 and sell it today you would earn a total of 282.00 from holding Federated Hermes Sdg or generate 23.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Franklin Adjustable Government vs. Federated Hermes Sdg
Performance |
| Timeline |
| Franklin Adjustable |
| Federated Hermes Sdg |
Franklin Adjustable and Federated Hermes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Adjustable and Federated Hermes
The main advantage of trading using opposite Franklin Adjustable and Federated Hermes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Adjustable position performs unexpectedly, Federated Hermes 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 Federated Hermes will offset losses from the drop in Federated Hermes' long position.| Franklin Adjustable vs. Virtus Seix Government | Franklin Adjustable vs. Dws Government Money | Franklin Adjustable vs. Dunham Porategovernment Bond | Franklin Adjustable vs. Ab Government Exchange |
| Federated Hermes vs. Franklin Adjustable Government | Federated Hermes vs. Inverse Government Long | Federated Hermes vs. Dws Government Money | Federated Hermes vs. Aig Government Money |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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