Correlation Between MFS Investment and Putnam High
Can any of the company-specific risk be diversified away by investing in both MFS Investment and Putnam High 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 Investment and Putnam High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MFS Investment Grade and Putnam High Income, you can compare the effects of market volatilities on MFS Investment and Putnam High 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 Investment with a short position of Putnam High. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFS Investment and Putnam High.
Diversification Opportunities for MFS Investment and Putnam High
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between MFS and Putnam is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding MFS Investment Grade and Putnam High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam High Income and MFS Investment 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 Investment Grade are associated (or correlated) with Putnam High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam High Income has no effect on the direction of MFS Investment i.e., MFS Investment and Putnam High go up and down completely randomly.
Pair Corralation between MFS Investment and Putnam High
Considering the 90-day investment horizon MFS Investment is expected to generate 2.22 times less return on investment than Putnam High. In addition to that, MFS Investment is 1.14 times more volatile than Putnam High Income. It trades about 0.09 of its total potential returns per unit of risk. Putnam High Income is currently generating about 0.22 per unit of volatility. If you would invest 660.00 in Putnam High Income on August 29, 2024 and sell it today you would earn a total of 15.00 from holding Putnam High Income or generate 2.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MFS Investment Grade vs. Putnam High Income
Performance |
| Timeline |
| MFS Investment Grade |
| Putnam High Income |
MFS Investment and Putnam High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MFS Investment and Putnam High
The main advantage of trading using opposite MFS Investment and Putnam High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFS Investment position performs unexpectedly, Putnam High 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 High will offset losses from the drop in Putnam High's long position.| MFS Investment vs. Aurora Innovation | MFS Investment vs. HUMANA INC | MFS Investment vs. Aquagold International | MFS Investment vs. Barloworld Ltd ADR |
| Putnam High vs. RiverNorthDoubleLine Strategic Opportunity | Putnam High vs. Cornerstone Strategic Return | Putnam High vs. Oxford Lane Capital | Putnam High vs. Horizon Technology Finance |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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