Correlation Between Federated Hermes and Federated Short-intermedia
Can any of the company-specific risk be diversified away by investing in both Federated Hermes and Federated Short-intermedia 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 Federated Short-intermedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Hermes Emerging and Federated Short Intermediate Total, you can compare the effects of market volatilities on Federated Hermes and Federated Short-intermedia 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 Federated Short-intermedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Hermes and Federated Short-intermedia.
Diversification Opportunities for Federated Hermes and Federated Short-intermedia
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Federated and Federated is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Federated Hermes Emerging and Federated Short Intermediate T in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Short-intermedia 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 Emerging are associated (or correlated) with Federated Short-intermedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Short-intermedia has no effect on the direction of Federated Hermes i.e., Federated Hermes and Federated Short-intermedia go up and down completely randomly.
Pair Corralation between Federated Hermes and Federated Short-intermedia
Assuming the 90 days horizon Federated Hermes Emerging is expected to generate 5.28 times more return on investment than Federated Short-intermedia. However, Federated Hermes is 5.28 times more volatile than Federated Short Intermediate Total. It trades about 0.34 of its potential returns per unit of risk. Federated Short Intermediate Total is currently generating about 0.12 per unit of risk. If you would invest 1,517 in Federated Hermes Emerging on April 19, 2025 and sell it today you would earn a total of 301.00 from holding Federated Hermes Emerging or generate 19.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.39% |
| Values | Daily Returns |
Federated Hermes Emerging vs. Federated Short Intermediate T
Performance |
| Timeline |
| Federated Hermes Emerging |
| Federated Short-intermedia |
Federated Hermes and Federated Short-intermedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Hermes and Federated Short-intermedia
The main advantage of trading using opposite Federated Hermes and Federated Short-intermedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Hermes position performs unexpectedly, Federated Short-intermedia 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 Short-intermedia will offset losses from the drop in Federated Short-intermedia's long position.| Federated Hermes vs. Ab Bond Inflation | Federated Hermes vs. Ab Bond Inflation | Federated Hermes vs. Ab Bond Inflation | Federated Hermes vs. Tiaa Cref Inflation Link |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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