Correlation Between Ab Bond and Putnam U
Can any of the company-specific risk be diversified away by investing in both Ab Bond and Putnam U 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 Ab Bond and Putnam U into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Bond Inflation and Putnam U S, you can compare the effects of market volatilities on Ab Bond and Putnam U 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 Ab Bond with a short position of Putnam U. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Bond and Putnam U.
Diversification Opportunities for Ab Bond and Putnam U
Poor diversification
The 3 months correlation between ABNTX and Putnam is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Ab Bond Inflation and Putnam U S in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam U S and Ab Bond 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 Ab Bond Inflation are associated (or correlated) with Putnam U. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam U S has no effect on the direction of Ab Bond i.e., Ab Bond and Putnam U go up and down completely randomly.
Pair Corralation between Ab Bond and Putnam U
Assuming the 90 days horizon Ab Bond is expected to generate 1.96 times less return on investment than Putnam U. But when comparing it to its historical volatility, Ab Bond Inflation is 2.82 times less risky than Putnam U. It trades about 0.17 of its potential returns per unit of risk. Putnam U S is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 823.00 in Putnam U S on September 4, 2024 and sell it today you would earn a total of 9.00 from holding Putnam U S or generate 1.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Ab Bond Inflation vs. Putnam U S
Performance |
| Timeline |
| Ab Bond Inflation |
| Putnam U S |
Ab Bond and Putnam U Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Bond and Putnam U
The main advantage of trading using opposite Ab Bond and Putnam U positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Bond position performs unexpectedly, Putnam U 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 Putnam U will offset losses from the drop in Putnam U's long position.| Ab Bond vs. Ab Global E | Ab Bond vs. Ab Global E | Ab Bond vs. Ab Global E | Ab Bond vs. Ab Minnesota Portfolio |
| Putnam U vs. Ab Bond Inflation | Putnam U vs. Ms Global Fixed | Putnam U vs. Dreyfusstandish Global Fixed | Putnam U vs. Gmo High Yield |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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