Correlation Between Pace High and Federated Hermes
Can any of the company-specific risk be diversified away by investing in both Pace High 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 Pace High and Federated Hermes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pace High Yield and Federated Hermes Inflation, you can compare the effects of market volatilities on Pace High 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 Pace High with a short position of Federated Hermes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pace High and Federated Hermes.
Diversification Opportunities for Pace High and Federated Hermes
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Pace and Federated is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Pace High Yield 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 Pace High 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 Pace High Yield 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 Pace High i.e., Pace High and Federated Hermes go up and down completely randomly.
Pair Corralation between Pace High and Federated Hermes
Assuming the 90 days horizon Pace High Yield is expected to generate 0.6 times more return on investment than Federated Hermes. However, Pace High Yield is 1.68 times less risky than Federated Hermes. It trades about -0.16 of its potential returns per unit of risk. Federated Hermes Inflation is currently generating about -0.44 per unit of risk. If you would invest 896.00 in Pace High Yield on October 14, 2024 and sell it today you would lose (5.00) from holding Pace High Yield or give up 0.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pace High Yield vs. Federated Hermes Inflation
Performance |
| Timeline |
| Pace High Yield |
| Federated Hermes Inf |
Pace High and Federated Hermes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pace High and Federated Hermes
The main advantage of trading using opposite Pace High and Federated Hermes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pace High 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.| Pace High vs. T Rowe Price | Pace High vs. Bbh Intermediate Municipal | Pace High vs. Morningstar Defensive Bond | Pace High vs. Old Westbury Fixed |
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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