Correlation Between Firsthand Alternative and Putnam Floating
Can any of the company-specific risk be diversified away by investing in both Firsthand Alternative and Putnam Floating 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 Firsthand Alternative and Putnam Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Firsthand Alternative Energy and Putnam Floating Rate, you can compare the effects of market volatilities on Firsthand Alternative and Putnam Floating 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 Firsthand Alternative with a short position of Putnam Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Firsthand Alternative and Putnam Floating.
Diversification Opportunities for Firsthand Alternative and Putnam Floating
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Firsthand and Putnam is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Firsthand Alternative Energy and Putnam Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Floating Rate and Firsthand Alternative 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 Firsthand Alternative Energy are associated (or correlated) with Putnam Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Floating Rate has no effect on the direction of Firsthand Alternative i.e., Firsthand Alternative and Putnam Floating go up and down completely randomly.
Pair Corralation between Firsthand Alternative and Putnam Floating
Assuming the 90 days horizon Firsthand Alternative Energy is expected to under-perform the Putnam Floating. In addition to that, Firsthand Alternative is 9.31 times more volatile than Putnam Floating Rate. It trades about -0.01 of its total potential returns per unit of risk. Putnam Floating Rate is currently generating about 0.21 per unit of volatility. If you would invest 658.00 in Putnam Floating Rate on August 29, 2024 and sell it today you would earn a total of 143.00 from holding Putnam Floating Rate or generate 21.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Firsthand Alternative Energy vs. Putnam Floating Rate
Performance |
| Timeline |
| Firsthand Alternative |
| Putnam Floating Rate |
Firsthand Alternative and Putnam Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Firsthand Alternative and Putnam Floating
The main advantage of trading using opposite Firsthand Alternative and Putnam Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Firsthand Alternative position performs unexpectedly, Putnam Floating 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 Floating will offset losses from the drop in Putnam Floating's long position.| Firsthand Alternative vs. Live Oak Health | Firsthand Alternative vs. HUMANA INC | Firsthand Alternative vs. Aquagold International | Firsthand Alternative vs. Barloworld Ltd ADR |
| Putnam Floating vs. Lord Abbett Convertible | Putnam Floating vs. Absolute Convertible Arbitrage | Putnam Floating vs. Virtus Convertible | Putnam Floating vs. Calamos Dynamic Convertible |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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