Correlation Between Federated Hermes and Federated
Can any of the company-specific risk be diversified away by investing in both Federated Hermes and Federated 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 Federated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Hermes Emerging and Federated Gov Sec, you can compare the effects of market volatilities on Federated Hermes and Federated 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 Federated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Hermes and Federated.
Diversification Opportunities for Federated Hermes and Federated
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Federated and Federated is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Federated Hermes Emerging and Federated Gov Sec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Gov Sec 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 Emerging are associated (or correlated) with Federated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Gov Sec has no effect on the direction of Federated Hermes i.e., Federated Hermes and Federated go up and down completely randomly.
Pair Corralation between Federated Hermes and Federated
Assuming the 90 days horizon Federated Hermes Emerging is expected to generate 7.2 times more return on investment than Federated. However, Federated Hermes is 7.2 times more volatile than Federated Gov Sec. It trades about 0.09 of its potential returns per unit of risk. Federated Gov Sec is currently generating about 0.13 per unit of risk. If you would invest 1,254 in Federated Hermes Emerging on August 26, 2024 and sell it today you would earn a total of 318.00 from holding Federated Hermes Emerging or generate 25.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Hermes Emerging vs. Federated Gov Sec
Performance |
| Timeline |
| Federated Hermes Emerging |
| Federated Gov Sec |
Federated Hermes and Federated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Hermes and Federated
The main advantage of trading using opposite Federated Hermes and Federated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Hermes position performs unexpectedly, Federated 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 will offset losses from the drop in Federated's long position.| Federated Hermes vs. Federated Emerging Market | Federated Hermes vs. Federated Mdt All | Federated Hermes vs. Federated Mdt Balanced | Federated Hermes vs. Federated Global Allocation |
| Federated vs. Federated Emerging Market | Federated vs. Federated Mdt Balanced | Federated vs. Federated Global Allocation | Federated vs. Federated Hermes Emerging |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |