Correlation Between Ishares Municipal and Putnam Growth
Can any of the company-specific risk be diversified away by investing in both Ishares Municipal and Putnam Growth 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 Ishares Municipal and Putnam Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ishares Municipal Bond and Putnam Growth Opportunities, you can compare the effects of market volatilities on Ishares Municipal and Putnam Growth 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 Ishares Municipal with a short position of Putnam Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ishares Municipal and Putnam Growth.
Diversification Opportunities for Ishares Municipal and Putnam Growth
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between IShares and Putnam is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Ishares Municipal Bond and Putnam Growth Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Growth Opport and Ishares Municipal 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 Ishares Municipal Bond are associated (or correlated) with Putnam Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Growth Opport has no effect on the direction of Ishares Municipal i.e., Ishares Municipal and Putnam Growth go up and down completely randomly.
Pair Corralation between Ishares Municipal and Putnam Growth
Assuming the 90 days horizon Ishares Municipal is expected to generate 8.09 times less return on investment than Putnam Growth. But when comparing it to its historical volatility, Ishares Municipal Bond is 4.19 times less risky than Putnam Growth. It trades about 0.05 of its potential returns per unit of risk. Putnam Growth Opportunities is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 3,002 in Putnam Growth Opportunities on September 3, 2024 and sell it today you would earn a total of 1,808 from holding Putnam Growth Opportunities or generate 60.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ishares Municipal Bond vs. Putnam Growth Opportunities
Performance |
| Timeline |
| Ishares Municipal Bond |
| Putnam Growth Opport |
Ishares Municipal and Putnam Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ishares Municipal and Putnam Growth
The main advantage of trading using opposite Ishares Municipal and Putnam Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ishares Municipal position performs unexpectedly, Putnam Growth 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 Growth will offset losses from the drop in Putnam Growth's long position.| Ishares Municipal vs. T Rowe Price | Ishares Municipal vs. John Hancock Funds | Ishares Municipal vs. Qs Moderate Growth | Ishares Municipal vs. T Rowe Price |
| Putnam Growth vs. Msift High Yield | Putnam Growth vs. Alpine High Yield | Putnam Growth vs. Prudential High Yield | Putnam Growth vs. Ppm 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |