Correlation Between Federated Hermes and Federated Hermes

Can any of the company-specific risk be diversified away by investing in both Federated Hermes 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 Federated Hermes and Federated Hermes 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 Hermes Sdg, you can compare the effects of market volatilities on Federated Hermes 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 Federated Hermes with a short position of Federated Hermes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Hermes and Federated Hermes.

Diversification Opportunities for Federated Hermes and Federated Hermes

0.37

Correlation Coefficient

Federated Hermes  Federated Hermes

Weak diversification

The 3 months correlation between Federated and Federated is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Federated Hermes Emerging and Federated Hermes Sdg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Hermes Sdg 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 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 Sdg has no effect on the direction of Federated Hermes i.e., Federated Hermes and Federated Hermes go up and down completely randomly.

Pair Corralation between Federated Hermes and Federated Hermes

Assuming the 90 days horizon Federated Hermes Emerging is expected to under-perform the Federated Hermes. In addition to that, Federated Hermes is 1.04 times more volatile than Federated Hermes Sdg. It trades about -0.12 of its total potential returns per unit of risk. Federated Hermes Sdg is currently generating about -0.1 per unit of volatility. If you would invest  1,439  in Federated Hermes Sdg on October 8, 2024 and sell it today you would lose (72.00) from holding Federated Hermes Sdg or give up 5.0% of portfolio value over 90 days.

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

Federated Hermes Emerging  vs.  Federated Hermes Sdg

Federated Hermes Emerging

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Federated Hermes Emerging has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Federated Hermes Sdg

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Federated Hermes Sdg has generated negative risk-adjusted returns adding no value to fund investors. 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.

Pair Trading with Federated Hermes and Federated Hermes

The main advantage of trading using opposite Federated Hermes and Federated Hermes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Hermes 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.

The idea behind Federated Hermes Emerging and Federated Hermes Sdg 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.