Correlation Between Astar and Putnam Ohio
Can any of the company-specific risk be diversified away by investing in both Astar and Putnam Ohio 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 Astar and Putnam Ohio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astar and Putnam Ohio Tax, you can compare the effects of market volatilities on Astar and Putnam Ohio 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 Astar with a short position of Putnam Ohio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astar and Putnam Ohio.
Diversification Opportunities for Astar and Putnam Ohio
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Astar and Putnam is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Astar and Putnam Ohio Tax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Ohio Tax and Astar 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 Astar are associated (or correlated) with Putnam Ohio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Ohio Tax has no effect on the direction of Astar i.e., Astar and Putnam Ohio go up and down completely randomly.
Pair Corralation between Astar and Putnam Ohio
Assuming the 90 days trading horizon Astar is expected to generate 25.76 times more return on investment than Putnam Ohio. However, Astar is 25.76 times more volatile than Putnam Ohio Tax. It trades about 0.05 of its potential returns per unit of risk. Putnam Ohio Tax is currently generating about 0.06 per unit of risk. If you would invest 6.20 in Astar on October 20, 2024 and sell it today you would earn a total of 0.16 from holding Astar or generate 2.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 90.91% |
| Values | Daily Returns |
Astar vs. Putnam Ohio Tax
Performance |
| Timeline |
| Astar |
| Putnam Ohio Tax |
Astar and Putnam Ohio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astar and Putnam Ohio
The main advantage of trading using opposite Astar and Putnam Ohio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astar position performs unexpectedly, Putnam Ohio 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 Ohio will offset losses from the drop in Putnam Ohio's long position.The idea behind Astar and Putnam Ohio Tax pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Putnam Ohio vs. Putnam Equity Income | Putnam Ohio vs. Putnam Tax Exempt | Putnam Ohio vs. Putnam Floating Rate | Putnam Ohio vs. Putnam 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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