Correlation Between Aberdeen Small and Federated Hermes
Can any of the company-specific risk be diversified away by investing in both Aberdeen Small 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 Aberdeen Small and Federated Hermes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aberdeen Small Cap and Federated Hermes Inflation, you can compare the effects of market volatilities on Aberdeen Small 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 Aberdeen Small with a short position of Federated Hermes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aberdeen Small and Federated Hermes.
Diversification Opportunities for Aberdeen Small and Federated Hermes
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aberdeen and Federated is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Small Cap and Federated Hermes Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Hermes Inf and Aberdeen Small 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 Aberdeen Small Cap 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 Inf has no effect on the direction of Aberdeen Small i.e., Aberdeen Small and Federated Hermes go up and down completely randomly.
Pair Corralation between Aberdeen Small and Federated Hermes
Assuming the 90 days horizon Aberdeen Small Cap is expected to generate 3.65 times more return on investment than Federated Hermes. However, Aberdeen Small is 3.65 times more volatile than Federated Hermes Inflation. It trades about 0.11 of its potential returns per unit of risk. Federated Hermes Inflation is currently generating about 0.06 per unit of risk. If you would invest 3,181 in Aberdeen Small Cap on August 26, 2024 and sell it today you would earn a total of 1,099 from holding Aberdeen Small Cap or generate 34.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aberdeen Small Cap vs. Federated Hermes Inflation
Performance |
| Timeline |
| Aberdeen Small Cap |
| Federated Hermes Inf |
Aberdeen Small and Federated Hermes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aberdeen Small and Federated Hermes
The main advantage of trading using opposite Aberdeen Small and Federated Hermes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aberdeen Small 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.| Aberdeen Small vs. Federated Hermes Inflation | Aberdeen Small vs. Ab Municipal Bond | Aberdeen Small vs. Lord Abbett Inflation | Aberdeen Small vs. Short Duration Inflation |
| Federated Hermes vs. Dws Government Money | Federated Hermes vs. California High Yield Municipal | Federated Hermes vs. Nuveen All American Municipal | Federated Hermes vs. Oklahoma Municipal Fund |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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