Correlation Between SPDR Barclays and Federated Hermes
Can any of the company-specific risk be diversified away by investing in both SPDR Barclays 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 SPDR Barclays and Federated Hermes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Barclays Short and Federated Hermes ETF, you can compare the effects of market volatilities on SPDR Barclays 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 SPDR Barclays with a short position of Federated Hermes. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Barclays and Federated Hermes.
Diversification Opportunities for SPDR Barclays and Federated Hermes
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SPDR and Federated is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Barclays Short and Federated Hermes ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Hermes ETF and SPDR Barclays 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 SPDR Barclays Short 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 ETF has no effect on the direction of SPDR Barclays i.e., SPDR Barclays and Federated Hermes go up and down completely randomly.
Pair Corralation between SPDR Barclays and Federated Hermes
Given the investment horizon of 90 days SPDR Barclays is expected to generate 1.18 times less return on investment than Federated Hermes. But when comparing it to its historical volatility, SPDR Barclays Short is 1.36 times less risky than Federated Hermes. It trades about 0.28 of its potential returns per unit of risk. Federated Hermes ETF is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 2,398 in Federated Hermes ETF on November 27, 2024 and sell it today you would earn a total of 14.00 from holding Federated Hermes ETF or generate 0.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
SPDR Barclays Short vs. Federated Hermes ETF
Performance |
| Timeline |
| SPDR Barclays Short |
| Federated Hermes ETF |
SPDR Barclays and Federated Hermes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Barclays and Federated Hermes
The main advantage of trading using opposite SPDR Barclays and Federated Hermes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Barclays 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.| SPDR Barclays vs. SPDR Barclays Intermediate | SPDR Barclays vs. Western Asset Short | SPDR Barclays vs. SPDR Barclays Short | SPDR Barclays vs. iShares 1 5 Year |
| Federated Hermes vs. Federated Hermes ETF | Federated Hermes vs. Dimensional ETF Trust | Federated Hermes vs. American Century ETF | Federated Hermes vs. BNY Mellon ETF |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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