Correlation Between Ameriprise Financial and Putnam Municipal
Can any of the company-specific risk be diversified away by investing in both Ameriprise Financial and Putnam Municipal 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 Ameriprise Financial and Putnam Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ameriprise Financial and Putnam Municipal Opportunities, you can compare the effects of market volatilities on Ameriprise Financial and Putnam Municipal 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 Ameriprise Financial with a short position of Putnam Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ameriprise Financial and Putnam Municipal.
Diversification Opportunities for Ameriprise Financial and Putnam Municipal
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ameriprise and Putnam is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Ameriprise Financial and Putnam Municipal Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Municipal Opp and Ameriprise Financial 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 Ameriprise Financial are associated (or correlated) with Putnam Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Municipal Opp has no effect on the direction of Ameriprise Financial i.e., Ameriprise Financial and Putnam Municipal go up and down completely randomly.
Pair Corralation between Ameriprise Financial and Putnam Municipal
Considering the 90-day investment horizon Ameriprise Financial is expected to under-perform the Putnam Municipal. But the stock apears to be less risky and, when comparing its historical volatility, Ameriprise Financial is 1.12 times less risky than Putnam Municipal. The stock trades about -0.13 of its potential returns per unit of risk. The Putnam Municipal Opportunities is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,032 in Putnam Municipal Opportunities on September 14, 2024 and sell it today you would earn a total of 30.00 from holding Putnam Municipal Opportunities or generate 2.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ameriprise Financial vs. Putnam Municipal Opportunities
Performance |
| Timeline |
| Ameriprise Financial |
| Putnam Municipal Opp |
Ameriprise Financial and Putnam Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ameriprise Financial and Putnam Municipal
The main advantage of trading using opposite Ameriprise Financial and Putnam Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ameriprise Financial position performs unexpectedly, Putnam Municipal 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 Municipal will offset losses from the drop in Putnam Municipal's long position.| Ameriprise Financial vs. Visa Class A | Ameriprise Financial vs. Diamond Hill Investment | Ameriprise Financial vs. Distoken Acquisition | Ameriprise Financial vs. AllianceBernstein Holding LP |
| Putnam Municipal vs. Invesco Municipal Income | Putnam Municipal vs. DWS Municipal Income | Putnam Municipal vs. MFS Municipal Income | Putnam Municipal vs. MFS High Income |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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