Correlation Between Federated Hermes and Dunham Corporate/govern
Can any of the company-specific risk be diversified away by investing in both Federated Hermes and Dunham Corporate/govern 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 Dunham Corporate/govern into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Hermes Ultrashort and Dunham Porategovernment Bond, you can compare the effects of market volatilities on Federated Hermes and Dunham Corporate/govern 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 Dunham Corporate/govern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Hermes and Dunham Corporate/govern.
Diversification Opportunities for Federated Hermes and Dunham Corporate/govern
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Federated and Dunham is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Federated Hermes Ultrashort and Dunham Porategovernment Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dunham Porategovernment 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 Ultrashort are associated (or correlated) with Dunham Corporate/govern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dunham Porategovernment has no effect on the direction of Federated Hermes i.e., Federated Hermes and Dunham Corporate/govern go up and down completely randomly.
Pair Corralation between Federated Hermes and Dunham Corporate/govern
Assuming the 90 days horizon Federated Hermes Ultrashort is expected to generate 0.28 times more return on investment than Dunham Corporate/govern. However, Federated Hermes Ultrashort is 3.51 times less risky than Dunham Corporate/govern. It trades about 0.24 of its potential returns per unit of risk. Dunham Porategovernment Bond is currently generating about 0.04 per unit of risk. If you would invest 829.00 in Federated Hermes Ultrashort on September 5, 2024 and sell it today you would earn a total of 99.00 from holding Federated Hermes Ultrashort or generate 11.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Federated Hermes Ultrashort vs. Dunham Porategovernment Bond
Performance |
| Timeline |
| Federated Hermes Ult |
| Dunham Porategovernment |
Federated Hermes and Dunham Corporate/govern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Hermes and Dunham Corporate/govern
The main advantage of trading using opposite Federated Hermes and Dunham Corporate/govern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Hermes position performs unexpectedly, Dunham Corporate/govern 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 Dunham Corporate/govern will offset losses from the drop in Dunham Corporate/govern's long position.| Federated Hermes vs. Guidepath Managed Futures | Federated Hermes vs. Aqr Managed Futures | Federated Hermes vs. Western Asset Inflation | Federated Hermes vs. Asg Managed Futures |
| Dunham Corporate/govern vs. Alpine High Yield | Dunham Corporate/govern vs. Blackrock High Yield | Dunham Corporate/govern vs. Pioneer High Yield | Dunham Corporate/govern vs. Guggenheim High Yield |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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