Correlation Between Short Duration and Putnam Global
Can any of the company-specific risk be diversified away by investing in both Short Duration and Putnam Global 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 Short Duration and Putnam Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Short Duration Inflation and Putnam Global Incm, you can compare the effects of market volatilities on Short Duration and Putnam Global 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 Short Duration with a short position of Putnam Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Short Duration and Putnam Global.
Diversification Opportunities for Short Duration and Putnam Global
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Short and Putnam is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Short Duration Inflation and Putnam Global Incm in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Global Incm and Short Duration 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 Short Duration Inflation are associated (or correlated) with Putnam Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Global Incm has no effect on the direction of Short Duration i.e., Short Duration and Putnam Global go up and down completely randomly.
Pair Corralation between Short Duration and Putnam Global
Assuming the 90 days horizon Short Duration Inflation is expected to generate 0.62 times more return on investment than Putnam Global. However, Short Duration Inflation is 1.61 times less risky than Putnam Global. It trades about 0.04 of its potential returns per unit of risk. Putnam Global Incm is currently generating about -0.09 per unit of risk. If you would invest 1,052 in Short Duration Inflation on September 12, 2024 and sell it today you would earn a total of 4.00 from holding Short Duration Inflation or generate 0.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Short Duration Inflation vs. Putnam Global Incm
Performance |
| Timeline |
| Short Duration Inflation |
| Putnam Global Incm |
Short Duration and Putnam Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Short Duration and Putnam Global
The main advantage of trading using opposite Short Duration and Putnam Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Short Duration position performs unexpectedly, Putnam Global 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 Global will offset losses from the drop in Putnam Global's long position.| Short Duration vs. Mid Cap Value | Short Duration vs. Equity Growth Fund | Short Duration vs. Income Growth Fund | Short Duration vs. Diversified Bond Fund |
| Putnam Global vs. Rbc Microcap Value | Putnam Global vs. Western Asset Municipal | Putnam Global vs. Leggmason Partners Institutional | Putnam Global vs. Qs Large Cap |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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