Correlation Between Federated Hermes and Floating Rate
Can any of the company-specific risk be diversified away by investing in both Federated Hermes and Floating Rate 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 Floating Rate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Hermes Inflation and Floating Rate Fund, you can compare the effects of market volatilities on Federated Hermes and Floating Rate 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 Floating Rate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Hermes and Floating Rate.
Diversification Opportunities for Federated Hermes and Floating Rate
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Federated and Floating is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Federated Hermes Inflation and Floating Rate Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Floating Rate 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 Inflation are associated (or correlated) with Floating Rate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Floating Rate has no effect on the direction of Federated Hermes i.e., Federated Hermes and Floating Rate go up and down completely randomly.
Pair Corralation between Federated Hermes and Floating Rate
Assuming the 90 days horizon Federated Hermes Inflation is expected to generate 2.06 times more return on investment than Floating Rate. However, Federated Hermes is 2.06 times more volatile than Floating Rate Fund. It trades about 0.24 of its potential returns per unit of risk. Floating Rate Fund is currently generating about 0.19 per unit of risk. If you would invest 978.00 in Federated Hermes Inflation on June 12, 2025 and sell it today you would earn a total of 36.00 from holding Federated Hermes Inflation or generate 3.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Hermes Inflation vs. Floating Rate Fund
Performance |
| Timeline |
| Federated Hermes Inf |
| Floating Rate |
Federated Hermes and Floating Rate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Hermes and Floating Rate
The main advantage of trading using opposite Federated Hermes and Floating Rate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Hermes position performs unexpectedly, Floating Rate 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 Floating Rate will offset losses from the drop in Floating Rate's long position.| Federated Hermes vs. Pace International Emerging | Federated Hermes vs. Rbb Fund | Federated Hermes vs. Doubleline Emerging Markets | Federated Hermes vs. Western Asset New |
| Floating Rate vs. Auer Growth Fund | Floating Rate vs. Qs Defensive Growth | Floating Rate vs. L Abbett Growth | Floating Rate vs. Artisan Small Cap |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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