Correlation Between Deutsche Global and Federated Hermes
Can any of the company-specific risk be diversified away by investing in both Deutsche Global 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 Deutsche Global and Federated Hermes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deutsche Global Inflation and Federated Hermes Inflation, you can compare the effects of market volatilities on Deutsche Global 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 Deutsche Global with a short position of Federated Hermes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Global and Federated Hermes.
Diversification Opportunities for Deutsche Global and Federated Hermes
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Deutsche and Federated is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Global Inflation 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 Deutsche Global 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 Deutsche Global Inflation 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 Deutsche Global i.e., Deutsche Global and Federated Hermes go up and down completely randomly.
Pair Corralation between Deutsche Global and Federated Hermes
Assuming the 90 days horizon Deutsche Global is expected to generate 1.11 times less return on investment than Federated Hermes. But when comparing it to its historical volatility, Deutsche Global Inflation is 1.03 times less risky than Federated Hermes. It trades about 0.09 of its potential returns per unit of risk. Federated Hermes Inflation is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 951.00 in Federated Hermes Inflation on August 24, 2024 and sell it today you would earn a total of 33.00 from holding Federated Hermes Inflation or generate 3.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Deutsche Global Inflation vs. Federated Hermes Inflation
Performance |
| Timeline |
| Deutsche Global Inflation |
| Federated Hermes Inf |
Deutsche Global and Federated Hermes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Global and Federated Hermes
The main advantage of trading using opposite Deutsche Global and Federated Hermes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Global 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.| Deutsche Global vs. Touchstone Premium Yield | Deutsche Global vs. Alliancebernstein Bond | Deutsche Global vs. Multisector Bond Sma | Deutsche Global vs. Bbh Intermediate Municipal |
| Federated Hermes vs. Prudential Jennison Financial | Federated Hermes vs. 1919 Financial Services | Federated Hermes vs. Transamerica Financial Life | Federated Hermes vs. Gabelli Global Financial |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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