Correlation Between MFS High and Putnam Premier
Can any of the company-specific risk be diversified away by investing in both MFS High and Putnam Premier 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 MFS High and Putnam Premier into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MFS High Yield and Putnam Premier Income, you can compare the effects of market volatilities on MFS High and Putnam Premier 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 MFS High with a short position of Putnam Premier. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFS High and Putnam Premier.
Diversification Opportunities for MFS High and Putnam Premier
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MFS and Putnam is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding MFS High Yield and Putnam Premier Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Premier Income and MFS High 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 MFS High Yield are associated (or correlated) with Putnam Premier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Premier Income has no effect on the direction of MFS High i.e., MFS High and Putnam Premier go up and down completely randomly.
Pair Corralation between MFS High and Putnam Premier
Considering the 90-day investment horizon MFS High Yield is expected to generate 1.11 times more return on investment than Putnam Premier. However, MFS High is 1.11 times more volatile than Putnam Premier Income. It trades about 0.08 of its potential returns per unit of risk. Putnam Premier Income is currently generating about 0.05 per unit of risk. If you would invest 299.00 in MFS High Yield on August 31, 2024 and sell it today you would earn a total of 66.00 from holding MFS High Yield or generate 22.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MFS High Yield vs. Putnam Premier Income
Performance |
| Timeline |
| MFS High Yield |
| Putnam Premier Income |
MFS High and Putnam Premier Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MFS High and Putnam Premier
The main advantage of trading using opposite MFS High and Putnam Premier positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFS High position performs unexpectedly, Putnam Premier 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 Premier will offset losses from the drop in Putnam Premier's long position.| MFS High vs. MFS Investment Grade | MFS High vs. MFS Municipal Income | MFS High vs. DTF Tax Free | MFS High vs. MFS Government Markets |
| Putnam Premier vs. Blackrock Floating Rate | Putnam Premier vs. Eaton Vance Senior | Putnam Premier vs. Eaton Vance Senior | Putnam Premier vs. Blackrock Debt Strategies |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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