Correlation Between Federated Hermes and Ab Global
Can any of the company-specific risk be diversified away by investing in both Federated Hermes and Ab Global 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 Ab Global 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 Ab Global Real, you can compare the effects of market volatilities on Federated Hermes and Ab Global 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 Ab Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Hermes and Ab Global.
Diversification Opportunities for Federated Hermes and Ab Global
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Federated and AEEIX is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Federated Hermes Conservative and Ab Global Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Global Real 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 Ab Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Global Real has no effect on the direction of Federated Hermes i.e., Federated Hermes and Ab Global go up and down completely randomly.
Pair Corralation between Federated Hermes and Ab Global
Assuming the 90 days horizon Federated Hermes is expected to generate 1.47 times less return on investment than Ab Global. But when comparing it to its historical volatility, Federated Hermes Conservative is 10.01 times less risky than Ab Global. It trades about 0.21 of its potential returns per unit of risk. Ab Global Real is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,255 in Ab Global Real on September 26, 2024 and sell it today you would earn a total of 173.00 from holding Ab Global Real or generate 13.78% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Federated Hermes Conservative vs. Ab Global Real
Performance |
Timeline |
Federated Hermes Con |
Ab Global Real |
Federated Hermes and Ab Global Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Federated Hermes and Ab Global
The main advantage of trading using opposite Federated Hermes and Ab Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Hermes position performs unexpectedly, Ab Global 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 Ab Global will offset losses from the drop in Ab Global's long position.Federated Hermes vs. Federated Emerging Market | Federated Hermes vs. Federated Mdt All | Federated Hermes vs. Federated Mdt Balanced | Federated Hermes vs. Federated Global Allocation |
Ab Global vs. Global Diversified Income | Ab Global vs. Federated Hermes Conservative | Ab Global vs. Elfun Diversified Fund | Ab Global vs. Jpmorgan Diversified Fund |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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