Correlation Between Franklin Real and Federated Hermes
Can any of the company-specific risk be diversified away by investing in both Franklin Real 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 Real 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 Real Estate and Federated Hermes Ultrashort, you can compare the effects of market volatilities on Franklin Real 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 Real with a short position of Federated Hermes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Real and Federated Hermes.
Diversification Opportunities for Franklin Real and Federated Hermes
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Franklin and Federated is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Real Estate and Federated Hermes Ultrashort in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Hermes Ult and Franklin Real 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 Real Estate 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 Ult has no effect on the direction of Franklin Real i.e., Franklin Real and Federated Hermes go up and down completely randomly.
Pair Corralation between Franklin Real and Federated Hermes
Assuming the 90 days horizon Franklin Real Estate is expected to generate 13.53 times more return on investment than Federated Hermes. However, Franklin Real is 13.53 times more volatile than Federated Hermes Ultrashort. It trades about 0.18 of its potential returns per unit of risk. Federated Hermes Ultrashort is currently generating about 0.07 per unit of risk. If you would invest 1,918 in Franklin Real Estate on September 1, 2024 and sell it today you would earn a total of 69.00 from holding Franklin Real Estate or generate 3.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Franklin Real Estate vs. Federated Hermes Ultrashort
Performance |
| Timeline |
| Franklin Real Estate |
| Federated Hermes Ult |
Franklin Real and Federated Hermes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Real and Federated Hermes
The main advantage of trading using opposite Franklin Real and Federated Hermes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Real 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 Real vs. Franklin Natural Resources | Franklin Real vs. Franklin Small Cap | Franklin Real vs. Templeton Developing Markets | Franklin Real vs. Franklin Balance Sheet |
| Federated Hermes vs. Federated Emerging Market | Federated Hermes vs. Federated Mdt All | Federated Hermes vs. Federated Mdt Balanced | Federated Hermes vs. Federated Global Allocation |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |