Correlation Between MFS Investment and Putnam Master
Can any of the company-specific risk be diversified away by investing in both MFS Investment and Putnam Master 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 Master 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 Master Intermediate, you can compare the effects of market volatilities on MFS Investment and Putnam Master 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 Master. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFS Investment and Putnam Master.
Diversification Opportunities for MFS Investment and Putnam Master
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between MFS and Putnam is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding MFS Investment Grade and Putnam Master Intermediate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Master Interm 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 Master. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Master Interm has no effect on the direction of MFS Investment i.e., MFS Investment and Putnam Master go up and down completely randomly.
Pair Corralation between MFS Investment and Putnam Master
Considering the 90-day investment horizon MFS Investment is expected to generate 1.21 times less return on investment than Putnam Master. But when comparing it to its historical volatility, MFS Investment Grade is 1.33 times less risky than Putnam Master. It trades about 0.04 of its potential returns per unit of risk. Putnam Master Intermediate is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 287.00 in Putnam Master Intermediate on October 25, 2024 and sell it today you would earn a total of 43.00 from holding Putnam Master Intermediate or generate 14.98% 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 Master Intermediate
Performance |
| Timeline |
| MFS Investment Grade |
| Putnam Master Interm |
MFS Investment and Putnam Master Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MFS Investment and Putnam Master
The main advantage of trading using opposite MFS Investment and Putnam Master positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFS Investment position performs unexpectedly, Putnam Master 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 Master will offset losses from the drop in Putnam Master's long position.| MFS Investment vs. Eaton Vance National | MFS Investment vs. Nuveen California Select | MFS Investment vs. Federated Premier Municipal |
| Putnam Master vs. MFS High Income | Putnam Master vs. MFS Investment Grade | Putnam Master vs. Eaton Vance National | Putnam Master vs. MFS 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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