Correlation Between Federated Hermes and Multisector Bond
Can any of the company-specific risk be diversified away by investing in both Federated Hermes and Multisector Bond 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 Federated Hermes and Multisector Bond into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Hermes Mdt and Multisector Bond Sma, you can compare the effects of market volatilities on Federated Hermes and Multisector Bond 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 Federated Hermes with a short position of Multisector Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Hermes and Multisector Bond.
Diversification Opportunities for Federated Hermes and Multisector Bond
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Federated and Multisector is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Federated Hermes Mdt and Multisector Bond Sma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multisector Bond Sma and Federated Hermes 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 Federated Hermes Mdt are associated (or correlated) with Multisector Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multisector Bond Sma has no effect on the direction of Federated Hermes i.e., Federated Hermes and Multisector Bond go up and down completely randomly.
Pair Corralation between Federated Hermes and Multisector Bond
Assuming the 90 days horizon Federated Hermes Mdt is expected to generate 1.56 times more return on investment than Multisector Bond. However, Federated Hermes is 1.56 times more volatile than Multisector Bond Sma. It trades about 0.18 of its potential returns per unit of risk. Multisector Bond Sma is currently generating about 0.05 per unit of risk. If you would invest 1,910 in Federated Hermes Mdt on September 12, 2024 and sell it today you would earn a total of 96.00 from holding Federated Hermes Mdt or generate 5.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Hermes Mdt vs. Multisector Bond Sma
Performance |
| Timeline |
| Federated Hermes Mdt |
| Multisector Bond Sma |
Federated Hermes and Multisector Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Hermes and Multisector Bond
The main advantage of trading using opposite Federated Hermes and Multisector Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Hermes position performs unexpectedly, Multisector Bond 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 Multisector Bond will offset losses from the drop in Multisector Bond's long position.| Federated Hermes vs. HUMANA INC | Federated Hermes vs. Aquagold International | Federated Hermes vs. Barloworld Ltd ADR | Federated Hermes vs. Morningstar Unconstrained Allocation |
| Multisector Bond vs. SCOR PK | Multisector Bond vs. Morningstar Unconstrained Allocation | Multisector Bond vs. Thrivent High Yield | Multisector Bond vs. Via Renewables |
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 CEOs Directory module to screen CEOs from public companies around the world.
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