Correlation Between Mutual Of and Federated Hermes
Can any of the company-specific risk be diversified away by investing in both Mutual Of 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 Mutual Of and Federated Hermes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mutual Of America and Federated Hermes Inflation, you can compare the effects of market volatilities on Mutual Of 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 Mutual Of with a short position of Federated Hermes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mutual Of and Federated Hermes.
Diversification Opportunities for Mutual Of and Federated Hermes
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mutual and Federated is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Mutual Of America 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 Mutual Of 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 Mutual Of America 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 Mutual Of i.e., Mutual Of and Federated Hermes go up and down completely randomly.
Pair Corralation between Mutual Of and Federated Hermes
Assuming the 90 days horizon Mutual Of America is expected to generate 1.61 times more return on investment than Federated Hermes. However, Mutual Of is 1.61 times more volatile than Federated Hermes Inflation. It trades about 0.19 of its potential returns per unit of risk. Federated Hermes Inflation is currently generating about 0.22 per unit of risk. If you would invest 2,204 in Mutual Of America on September 13, 2024 and sell it today you would earn a total of 30.00 from holding Mutual Of America or generate 1.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Mutual Of America vs. Federated Hermes Inflation
Performance |
| Timeline |
| Mutual Of America |
| Federated Hermes Inf |
Mutual Of and Federated Hermes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mutual Of and Federated Hermes
The main advantage of trading using opposite Mutual Of and Federated Hermes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mutual Of 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.| Mutual Of vs. Mutual Of America | Mutual Of vs. Mutual Of America | Mutual Of vs. Mutual Of America | Mutual Of vs. Mutual Of America |
| Federated Hermes vs. Gabelli Convertible And | Federated Hermes vs. Putnam Convertible Incm Gwth | Federated Hermes vs. Allianzgi Convertible Income | Federated Hermes vs. Rationalpier 88 Convertible |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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