Correlation Between Aberdeen Income and Putnam High
Can any of the company-specific risk be diversified away by investing in both Aberdeen Income and Putnam 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 Aberdeen Income and Putnam High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aberdeen Income Credit and Putnam High Income, you can compare the effects of market volatilities on Aberdeen Income and Putnam 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 Aberdeen Income with a short position of Putnam High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aberdeen Income and Putnam High.
Diversification Opportunities for Aberdeen Income and Putnam High
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Aberdeen and Putnam is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Income Credit and Putnam High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam High Income and Aberdeen Income 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 Aberdeen Income Credit are associated (or correlated) with Putnam High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam High Income has no effect on the direction of Aberdeen Income i.e., Aberdeen Income and Putnam High go up and down completely randomly.
Pair Corralation between Aberdeen Income and Putnam High
Considering the 90-day investment horizon Aberdeen Income is expected to generate 1.22 times less return on investment than Putnam High. But when comparing it to its historical volatility, Aberdeen Income Credit is 1.04 times less risky than Putnam High. It trades about 0.07 of its potential returns per unit of risk. Putnam High Income is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 532.00 in Putnam High Income on August 31, 2024 and sell it today you would earn a total of 149.00 from holding Putnam High Income or generate 28.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aberdeen Income Credit vs. Putnam High Income
Performance |
| Timeline |
| Aberdeen Income Credit |
| Putnam High Income |
Aberdeen Income and Putnam High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aberdeen Income and Putnam High
The main advantage of trading using opposite Aberdeen Income and Putnam High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aberdeen Income position performs unexpectedly, Putnam 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 Putnam High will offset losses from the drop in Putnam High's long position.| Aberdeen Income vs. MFS Investment Grade | Aberdeen Income vs. Eaton Vance Municipal | Aberdeen Income vs. DTF Tax Free | Aberdeen Income vs. HUMANA INC |
| Putnam High vs. RiverNorthDoubleLine Strategic Opportunity | Putnam High vs. Cornerstone Strategic Return | Putnam High vs. Oxford Lane Capital | Putnam High vs. Horizon Technology Finance |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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