Correlation Between Harding Loevner and Federated Hermes
Can any of the company-specific risk be diversified away by investing in both Harding Loevner 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 Harding Loevner and Federated Hermes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Harding Loevner Global and Federated Hermes Conservative, you can compare the effects of market volatilities on Harding Loevner 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 Harding Loevner with a short position of Federated Hermes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harding Loevner and Federated Hermes.
Diversification Opportunities for Harding Loevner and Federated Hermes
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Harding and Federated is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Harding Loevner Global 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 Harding Loevner 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 Harding Loevner Global 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 Harding Loevner i.e., Harding Loevner and Federated Hermes go up and down completely randomly.
Pair Corralation between Harding Loevner and Federated Hermes
Assuming the 90 days horizon Harding Loevner Global is expected to under-perform the Federated Hermes. In addition to that, Harding Loevner is 55.53 times more volatile than Federated Hermes Conservative. It trades about -0.14 of its total potential returns per unit of risk. Federated Hermes Conservative is currently generating about 0.19 per unit of volatility. If you would invest 997.00 in Federated Hermes Conservative on October 30, 2024 and sell it today you would earn a total of 5.00 from holding Federated Hermes Conservative or generate 0.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harding Loevner Global vs. Federated Hermes Conservative
Performance |
| Timeline |
| Harding Loevner Global |
| Federated Hermes Con |
Harding Loevner and Federated Hermes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harding Loevner and Federated Hermes
The main advantage of trading using opposite Harding Loevner and Federated Hermes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harding Loevner 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.| Harding Loevner vs. Intermediate Government Bond | Harding Loevner vs. Dreyfus Government Cash | Harding Loevner vs. Virtus Seix Government | Harding Loevner vs. Ridgeworth Seix Government |
| Federated Hermes vs. Mesirow Financial High | Federated Hermes vs. Metropolitan West High | Federated Hermes vs. Ab High Income | Federated Hermes vs. Aqr Risk Parity |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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