Correlation Between Fulcrum Diversified and Putnam Tax
Can any of the company-specific risk be diversified away by investing in both Fulcrum Diversified and Putnam Tax 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 Fulcrum Diversified and Putnam Tax into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fulcrum Diversified Absolute and Putnam Tax Exempt, you can compare the effects of market volatilities on Fulcrum Diversified and Putnam Tax 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 Fulcrum Diversified with a short position of Putnam Tax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fulcrum Diversified and Putnam Tax.
Diversification Opportunities for Fulcrum Diversified and Putnam Tax
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fulcrum and Putnam is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Fulcrum Diversified Absolute and Putnam Tax Exempt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Tax Exempt and Fulcrum Diversified 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 Fulcrum Diversified Absolute are associated (or correlated) with Putnam Tax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Tax Exempt has no effect on the direction of Fulcrum Diversified i.e., Fulcrum Diversified and Putnam Tax go up and down completely randomly.
Pair Corralation between Fulcrum Diversified and Putnam Tax
Assuming the 90 days horizon Fulcrum Diversified Absolute is expected to generate 1.31 times more return on investment than Putnam Tax. However, Fulcrum Diversified is 1.31 times more volatile than Putnam Tax Exempt. It trades about 0.06 of its potential returns per unit of risk. Putnam Tax Exempt is currently generating about -0.01 per unit of risk. If you would invest 923.00 in Fulcrum Diversified Absolute on November 2, 2024 and sell it today you would earn a total of 21.00 from holding Fulcrum Diversified Absolute or generate 2.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fulcrum Diversified Absolute vs. Putnam Tax Exempt
Performance |
| Timeline |
| Fulcrum Diversified |
| Putnam Tax Exempt |
Fulcrum Diversified and Putnam Tax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fulcrum Diversified and Putnam Tax
The main advantage of trading using opposite Fulcrum Diversified and Putnam Tax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fulcrum Diversified position performs unexpectedly, Putnam Tax 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 Tax will offset losses from the drop in Putnam Tax's long position.| Fulcrum Diversified vs. Baillie Gifford Health | Fulcrum Diversified vs. Hartford Healthcare Hls | Fulcrum Diversified vs. The Gabelli Healthcare | Fulcrum Diversified vs. Invesco Global Health |
| Putnam Tax vs. Columbia Global Technology | Putnam Tax vs. Towpath Technology | Putnam Tax vs. Goldman Sachs Technology | Putnam Tax vs. Global Technology Portfolio |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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