Correlation Between Retireful and Federated Hermes

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

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

Diversification Opportunities for Retireful and Federated Hermes

-0.03

Correlation Coefficient

Retireful  Federated Hermes

Good diversification

The 3 months correlation between Retireful and Federated is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Retireful and Federated Hermes ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Hermes ETF and Retireful 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 Retireful 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 ETF has no effect on the direction of Retireful i.e., Retireful and Federated Hermes go up and down completely randomly.

Pair Corralation between Retireful and Federated Hermes

If you would invest  2,297  in Federated Hermes ETF on September 5, 2024 and sell it today you would earn a total of  21.00  from holding Federated Hermes ETF or generate 0.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	4.55%
Values	Daily Returns

Retireful  vs.  Federated Hermes ETF

Retireful

Risk-Adjusted Performance

0 of 100

Strong

Over the last 90 days Retireful has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively unsteady technical indicators, Retireful reported solid returns over the last few months and may actually be approaching a breakup point.

Federated Hermes ETF

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Federated Hermes ETF are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Federated Hermes is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Retireful and Federated Hermes

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

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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.