Correlation Between Fa 529 and Putnam High
Can any of the company-specific risk be diversified away by investing in both Fa 529 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 Fa 529 and Putnam High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fa 529 Aggressive and Putnam High Yield, you can compare the effects of market volatilities on Fa 529 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 Fa 529 with a short position of Putnam High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fa 529 and Putnam High.
Diversification Opportunities for Fa 529 and Putnam High
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between FFCGX and Putnam is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Fa 529 Aggressive and Putnam High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam High Yield and Fa 529 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 Fa 529 Aggressive 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 Yield has no effect on the direction of Fa 529 i.e., Fa 529 and Putnam High go up and down completely randomly.
Pair Corralation between Fa 529 and Putnam High
Assuming the 90 days horizon Fa 529 Aggressive is expected to generate 3.12 times more return on investment than Putnam High. However, Fa 529 is 3.12 times more volatile than Putnam High Yield. It trades about 0.11 of its potential returns per unit of risk. Putnam High Yield is currently generating about 0.18 per unit of risk. If you would invest 3,139 in Fa 529 Aggressive on September 12, 2024 and sell it today you would earn a total of 908.00 from holding Fa 529 Aggressive or generate 28.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fa 529 Aggressive vs. Putnam High Yield
Performance |
| Timeline |
| Fa 529 Aggressive |
| Putnam High Yield |
Fa 529 and Putnam High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fa 529 and Putnam High
The main advantage of trading using opposite Fa 529 and Putnam High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fa 529 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.| Fa 529 vs. Artisan High Income | Fa 529 vs. Pace High Yield | Fa 529 vs. Multisector Bond Sma | Fa 529 vs. California Bond Fund |
| Putnam High vs. Intal High Relative | Putnam High vs. Ab Global Risk | Putnam High vs. Needham Aggressive Growth | Putnam High vs. Ppm 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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