Correlation Between Vanguard Total and Federated Hermes
Can any of the company-specific risk be diversified away by investing in both Vanguard Total 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 Vanguard Total and Federated Hermes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Total Bond and Federated Hermes Core, you can compare the effects of market volatilities on Vanguard Total 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 Vanguard Total with a short position of Federated Hermes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Total and Federated Hermes.
Diversification Opportunities for Vanguard Total and Federated Hermes
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vanguard and Federated is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Total Bond and Federated Hermes Core in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Hermes Core and Vanguard Total 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 Vanguard Total Bond 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 Core has no effect on the direction of Vanguard Total i.e., Vanguard Total and Federated Hermes go up and down completely randomly.
Pair Corralation between Vanguard Total and Federated Hermes
If you would invest 933.00 in Vanguard Total Bond on September 12, 2024 and sell it today you would earn a total of 32.00 from holding Vanguard Total Bond or generate 3.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 0.4% |
| Values | Daily Returns |
Vanguard Total Bond vs. Federated Hermes Core
Performance |
| Timeline |
| Vanguard Total Bond |
| Federated Hermes Core |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Vanguard Total and Federated Hermes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Total and Federated Hermes
The main advantage of trading using opposite Vanguard Total and Federated Hermes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Total 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.| Vanguard Total vs. Upright Assets Allocation | Vanguard Total vs. Rational Strategic Allocation | Vanguard Total vs. Jhancock Disciplined Value | Vanguard Total vs. Aqr Large Cap |
| Federated Hermes vs. Western Asset Diversified | Federated Hermes vs. Calvert Developed Market | Federated Hermes vs. Barings Emerging Markets | Federated Hermes vs. Aqr Long Short Equity |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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