Correlation Between Federated Hermes and Federated Short
Can any of the company-specific risk be diversified away by investing in both Federated Hermes and Federated Short 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 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Hermes Intermediate and Federated Short Intermediate Total, you can compare the effects of market volatilities on Federated Hermes and Federated Short 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. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Hermes and Federated Short.
Diversification Opportunities for Federated Hermes and Federated Short
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Federated and Federated is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Federated Hermes Intermediate and Federated Short Intermediate T in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Short Inte 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 Intermediate are associated (or correlated) with Federated Short. 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 Inte has no effect on the direction of Federated Hermes i.e., Federated Hermes and Federated Short go up and down completely randomly.
Pair Corralation between Federated Hermes and Federated Short
Assuming the 90 days horizon Federated Hermes Intermediate is expected to generate 1.21 times more return on investment than Federated Short. However, Federated Hermes is 1.21 times more volatile than Federated Short Intermediate Total. It trades about 0.17 of its potential returns per unit of risk. Federated Short Intermediate Total is currently generating about 0.18 per unit of risk. If you would invest 851.00 in Federated Hermes Intermediate on May 30, 2025 and sell it today you would earn a total of 18.00 from holding Federated Hermes Intermediate or generate 2.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Hermes Intermediate vs. Federated Short Intermediate T
Performance |
| Timeline |
| Federated Hermes Int |
| Federated Short Inte |
Federated Hermes and Federated Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Hermes and Federated Short
The main advantage of trading using opposite Federated Hermes and Federated Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Hermes position performs unexpectedly, Federated Short 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 will offset losses from the drop in Federated Short's long position.| Federated Hermes vs. Global Resources Fund | Federated Hermes vs. Energy Basic Materials | Federated Hermes vs. Blackrock All Cap Energy | Federated Hermes vs. Vanguard Energy Index |
| Federated Short vs. Federated Emerging Market | Federated Short vs. Federated Mdt All | Federated Short vs. Federated Mdt Balanced | Federated Short vs. Federated Global Allocation |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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