Correlation Between Siit Emerging and Federated Hermes

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

By analyzing existing cross correlation between Siit Emerging Markets and Federated Hermes Ultrashort, you can compare the effects of market volatilities on Siit Emerging 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 Siit Emerging with a short position of Federated Hermes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siit Emerging and Federated Hermes.

Diversification Opportunities for Siit Emerging and Federated Hermes

-0.57

Correlation Coefficient

Siit Emerging  Federated Hermes

Excellent diversification

The 3 months correlation between Siit and Federated is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Siit Emerging Markets and Federated Hermes Ultrashort in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Hermes Ult and Siit Emerging 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 Siit Emerging Markets 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 Ult has no effect on the direction of Siit Emerging i.e., Siit Emerging and Federated Hermes go up and down completely randomly.

Pair Corralation between Siit Emerging and Federated Hermes

Assuming the 90 days horizon Siit Emerging Markets is expected to under-perform the Federated Hermes. In addition to that, Siit Emerging is 8.61 times more volatile than Federated Hermes Ultrashort. It trades about -0.13 of its total potential returns per unit of risk. Federated Hermes Ultrashort is currently generating about 0.19 per unit of volatility. If you would invest  923.00  in Federated Hermes Ultrashort on September 27, 2024 and sell it today you would earn a total of  4.00  from holding Federated Hermes Ultrashort or generate 0.43% return on investment over 90 days.

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

Siit Emerging Markets  vs.  Federated Hermes Ultrashort

Siit Emerging Markets

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Siit Emerging Markets 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 Ult

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Federated Hermes Ultrashort are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong essential 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 Siit Emerging and Federated Hermes

The main advantage of trading using opposite Siit Emerging and Federated Hermes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siit Emerging 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 Siit Emerging Markets and Federated Hermes Ultrashort 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.