Correlation Between Quantitative and Federated Hermes
Can any of the company-specific risk be diversified away by investing in both Quantitative 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 Quantitative and Federated Hermes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quantitative Longshort Equity and Federated Hermes Inflation, you can compare the effects of market volatilities on Quantitative 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 Quantitative with a short position of Federated Hermes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quantitative and Federated Hermes.
Diversification Opportunities for Quantitative and Federated Hermes
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Quantitative and Federated is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Quantitative Longshort Equity 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 Quantitative 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 Quantitative Longshort Equity 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 Quantitative i.e., Quantitative and Federated Hermes go up and down completely randomly.
Pair Corralation between Quantitative and Federated Hermes
Assuming the 90 days horizon Quantitative Longshort Equity is expected to under-perform the Federated Hermes. In addition to that, Quantitative is 1.51 times more volatile than Federated Hermes Inflation. It trades about -0.15 of its total potential returns per unit of risk. Federated Hermes Inflation is currently generating about 0.26 per unit of volatility. If you would invest 976.00 in Federated Hermes Inflation on November 28, 2024 and sell it today you would earn a total of 14.00 from holding Federated Hermes Inflation or generate 1.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Quantitative Longshort Equity vs. Federated Hermes Inflation
Performance |
| Timeline |
| Quantitative Longshort |
| Federated Hermes Inf |
Quantitative and Federated Hermes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Quantitative and Federated Hermes
The main advantage of trading using opposite Quantitative and Federated Hermes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quantitative 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.| Quantitative vs. Baillie Gifford Health | Quantitative vs. Putnam Global Health | Quantitative vs. Blackrock Health Sciences | Quantitative vs. John Hancock Variable |
| 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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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