Correlation Between Federated Hermes and Pace High
Can any of the company-specific risk be diversified away by investing in both Federated Hermes and Pace High 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 Pace High 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 Pace High Yield, you can compare the effects of market volatilities on Federated Hermes and Pace High 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 Pace High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Hermes and Pace High.
Diversification Opportunities for Federated Hermes and Pace High
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Federated and Pace is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Federated Hermes Conservative and Pace High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pace High Yield 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 Pace High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pace High Yield has no effect on the direction of Federated Hermes i.e., Federated Hermes and Pace High go up and down completely randomly.
Pair Corralation between Federated Hermes and Pace High
Assuming the 90 days horizon Federated Hermes Conservative is expected to generate 0.6 times more return on investment than Pace High. However, Federated Hermes Conservative is 1.66 times less risky than Pace High. It trades about 0.13 of its potential returns per unit of risk. Pace High Yield is currently generating about 0.0 per unit of risk. If you would invest 994.00 in Federated Hermes Conservative on September 24, 2024 and sell it today you would earn a total of 7.00 from holding Federated Hermes Conservative or generate 0.7% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Federated Hermes Conservative vs. Pace High Yield
Performance |
Timeline |
Federated Hermes Con |
Pace High Yield |
Federated Hermes and Pace High Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Federated Hermes and Pace High
The main advantage of trading using opposite Federated Hermes and Pace High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Hermes position performs unexpectedly, Pace High 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 Pace High will offset losses from the drop in Pace High'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 |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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