Correlation Between Cornerstone Strategic and Putnam Dynamic
Can any of the company-specific risk be diversified away by investing in both Cornerstone Strategic and Putnam Dynamic 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 Cornerstone Strategic and Putnam Dynamic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cornerstone Strategic Return and Putnam Dynamic Asset, you can compare the effects of market volatilities on Cornerstone Strategic and Putnam Dynamic 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 Cornerstone Strategic with a short position of Putnam Dynamic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cornerstone Strategic and Putnam Dynamic.
Diversification Opportunities for Cornerstone Strategic and Putnam Dynamic
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cornerstone and Putnam is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Cornerstone Strategic Return and Putnam Dynamic Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Dynamic Asset and Cornerstone Strategic 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 Cornerstone Strategic Return are associated (or correlated) with Putnam Dynamic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Dynamic Asset has no effect on the direction of Cornerstone Strategic i.e., Cornerstone Strategic and Putnam Dynamic go up and down completely randomly.
Pair Corralation between Cornerstone Strategic and Putnam Dynamic
Considering the 90-day investment horizon Cornerstone Strategic Return is expected to generate 1.65 times more return on investment than Putnam Dynamic. However, Cornerstone Strategic is 1.65 times more volatile than Putnam Dynamic Asset. It trades about 0.41 of its potential returns per unit of risk. Putnam Dynamic Asset is currently generating about 0.16 per unit of risk. If you would invest 833.00 in Cornerstone Strategic Return on August 29, 2024 and sell it today you would earn a total of 83.00 from holding Cornerstone Strategic Return or generate 9.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cornerstone Strategic Return vs. Putnam Dynamic Asset
Performance |
| Timeline |
| Cornerstone Strategic |
| Putnam Dynamic Asset |
Cornerstone Strategic and Putnam Dynamic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cornerstone Strategic and Putnam Dynamic
The main advantage of trading using opposite Cornerstone Strategic and Putnam Dynamic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cornerstone Strategic position performs unexpectedly, Putnam Dynamic 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 Dynamic will offset losses from the drop in Putnam Dynamic's long position.| Cornerstone Strategic vs. Gabelli Global Small | Cornerstone Strategic vs. MFS Investment Grade | Cornerstone Strategic vs. Eaton Vance National | Cornerstone Strategic vs. GAMCO Natural Resources |
| Putnam Dynamic vs. Old Westbury Short Term | Putnam Dynamic vs. Quantitative Longshort Equity | Putnam Dynamic vs. Siit Ultra Short | Putnam Dynamic vs. Vanguard Short Term Federal |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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