Correlation Between Federated Hermes and Nationwide Growth
Can any of the company-specific risk be diversified away by investing in both Federated Hermes and Nationwide Growth 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 Nationwide Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Hermes Inflation and Nationwide Growth Fund, you can compare the effects of market volatilities on Federated Hermes and Nationwide Growth 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 Nationwide Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Hermes and Nationwide Growth.
Diversification Opportunities for Federated Hermes and Nationwide Growth
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Federated and Nationwide is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Federated Hermes Inflation and Nationwide Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nationwide Growth 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 Inflation are associated (or correlated) with Nationwide Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nationwide Growth has no effect on the direction of Federated Hermes i.e., Federated Hermes and Nationwide Growth go up and down completely randomly.
Pair Corralation between Federated Hermes and Nationwide Growth
Assuming the 90 days horizon Federated Hermes Inflation is expected to under-perform the Nationwide Growth. But the mutual fund apears to be less risky and, when comparing its historical volatility, Federated Hermes Inflation is 2.35 times less risky than Nationwide Growth. The mutual fund trades about -0.1 of its potential returns per unit of risk. The Nationwide Growth Fund is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 1,636 in Nationwide Growth Fund on September 13, 2024 and sell it today you would earn a total of 119.00 from holding Nationwide Growth Fund or generate 7.27% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Federated Hermes Inflation vs. Nationwide Growth Fund
Performance |
Timeline |
Federated Hermes Inf |
Nationwide Growth |
Federated Hermes and Nationwide Growth Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Federated Hermes and Nationwide Growth
The main advantage of trading using opposite Federated Hermes and Nationwide Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Hermes position performs unexpectedly, Nationwide Growth 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 Nationwide Growth will offset losses from the drop in Nationwide Growth's long position.Federated Hermes vs. Gabelli Convertible And | Federated Hermes vs. Putnam Convertible Incm Gwth | Federated Hermes vs. Allianzgi Convertible Income | Federated Hermes vs. Rationalpier 88 Convertible |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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