Correlation Between Transamerica Financial and Federated Hermes
Can any of the company-specific risk be diversified away by investing in both Transamerica Financial 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 Transamerica Financial and Federated Hermes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transamerica Financial Life and Federated Hermes Inflation, you can compare the effects of market volatilities on Transamerica Financial 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 Transamerica Financial with a short position of Federated Hermes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transamerica Financial and Federated Hermes.
Diversification Opportunities for Transamerica Financial and Federated Hermes
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Transamerica and Federated is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Transamerica Financial Life 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 Transamerica Financial 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 Transamerica Financial Life 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 Transamerica Financial i.e., Transamerica Financial and Federated Hermes go up and down completely randomly.
Pair Corralation between Transamerica Financial and Federated Hermes
Assuming the 90 days horizon Transamerica Financial Life is expected to generate 3.0 times more return on investment than Federated Hermes. However, Transamerica Financial is 3.0 times more volatile than Federated Hermes Inflation. It trades about 0.29 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 1,185 in Transamerica Financial Life on August 27, 2024 and sell it today you would earn a total of 58.00 from holding Transamerica Financial Life or generate 4.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Transamerica Financial Life vs. Federated Hermes Inflation
Performance |
| Timeline |
| Transamerica Financial |
| Federated Hermes Inf |
Transamerica Financial and Federated Hermes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transamerica Financial and Federated Hermes
The main advantage of trading using opposite Transamerica Financial and Federated Hermes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transamerica Financial 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.| Transamerica Financial vs. Morningstar Municipal Bond | Transamerica Financial vs. Oklahoma Municipal Fund | Transamerica Financial vs. Ab Impact Municipal | Transamerica Financial vs. Ishares Municipal Bond |
| Federated Hermes vs. Deutsche Health And | Federated Hermes vs. Alphacentric Lifesci Healthcare | Federated Hermes vs. Baron Health Care | Federated Hermes vs. Allianzgi Health Sciences |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |