Correlation Between Federated Hermes and Jpmorgan E

Can any of the company-specific risk be diversified away by investing in both Federated Hermes and Jpmorgan E 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 Jpmorgan E into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Federated Hermes Conservative and Jpmorgan E Bond, you can compare the effects of market volatilities on Federated Hermes and Jpmorgan E 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 Jpmorgan E. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Hermes and Jpmorgan E.

Diversification Opportunities for Federated Hermes and Jpmorgan E

0.13

Correlation Coefficient

Federated Hermes  Jpmorgan E

Average diversification

The 3 months correlation between Federated and Jpmorgan is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Federated Hermes Conservative and Jpmorgan E Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan E Bond 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 Conservative are associated (or correlated) with Jpmorgan E. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan E Bond has no effect on the direction of Federated Hermes i.e., Federated Hermes and Jpmorgan E go up and down completely randomly.

Pair Corralation between Federated Hermes and Jpmorgan E

Assuming the 90 days horizon Federated Hermes Conservative is expected to generate about the same return on investment as Jpmorgan E Bond. But, Federated Hermes Conservative is 3.72 times less risky than Jpmorgan E. It trades about 0.18 of its potential returns per unit of risk. Jpmorgan E Bond is currently generating about 0.05 per unit of risk. If you would invest  1,027  in Jpmorgan E Bond on December 4, 2024 and sell it today you would earn a total of  9.00  from holding Jpmorgan E Bond or generate 0.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Federated Hermes Conservative  vs.  Jpmorgan E Bond

Federated Hermes Con

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Federated Hermes Conservative are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Federated Hermes is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Jpmorgan E Bond

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Jpmorgan E Bond are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Jpmorgan E is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Federated Hermes and Jpmorgan E

The main advantage of trading using opposite Federated Hermes and Jpmorgan E positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Hermes position performs unexpectedly, Jpmorgan E 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 Jpmorgan E will offset losses from the drop in Jpmorgan E's long position.

The idea behind Federated Hermes Conservative and Jpmorgan E Bond pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.