Correlation Between Federated Global and Federated Hermes
Can any of the company-specific risk be diversified away by investing in both Federated Global 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 Federated Global and Federated Hermes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Global Total and Federated Hermes Conservative, you can compare the effects of market volatilities on Federated Global 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 Federated Global with a short position of Federated Hermes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Global and Federated Hermes.
Diversification Opportunities for Federated Global and Federated Hermes
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Federated and Federated is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Federated Global Total and Federated Hermes Conservative in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Hermes Con and Federated Global 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 Global Total 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 Con has no effect on the direction of Federated Global i.e., Federated Global and Federated Hermes go up and down completely randomly.
Pair Corralation between Federated Global and Federated Hermes
Assuming the 90 days horizon Federated Global is expected to generate 2.84 times less return on investment than Federated Hermes. In addition to that, Federated Global is 5.03 times more volatile than Federated Hermes Conservative. It trades about 0.01 of its total potential returns per unit of risk. Federated Hermes Conservative is currently generating about 0.21 per unit of volatility. If you would invest 997.00 in Federated Hermes Conservative on August 30, 2024 and sell it today you would earn a total of 4.00 from holding Federated Hermes Conservative or generate 0.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Global Total vs. Federated Hermes Conservative
Performance |
| Timeline |
| Federated Global Total |
| Federated Hermes Con |
Federated Global and Federated Hermes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Global and Federated Hermes
The main advantage of trading using opposite Federated Global and Federated Hermes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Global 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.| Federated Global vs. Fidelity Advisor Gold | Federated Global vs. The Gold Bullion | Federated Global vs. Great West Goldman Sachs | Federated Global vs. James Balanced Golden |
| Federated Hermes vs. Heartland Value Plus | Federated Hermes vs. Mutual Of America | Federated Hermes vs. American Century Etf | Federated Hermes vs. Boston Partners Small |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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