Correlation Between Franklin Federal and Putnam Short
Can any of the company-specific risk be diversified away by investing in both Franklin Federal and Putnam Short 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 Franklin Federal and Putnam Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Federal Limited Term and Putnam Short Duration, you can compare the effects of market volatilities on Franklin Federal and Putnam Short 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 Franklin Federal with a short position of Putnam Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Federal and Putnam Short.
Diversification Opportunities for Franklin Federal and Putnam Short
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and Putnam is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Federal Limited Term and Putnam Short Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Short Duration and Franklin Federal 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 Franklin Federal Limited Term are associated (or correlated) with Putnam Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Short Duration has no effect on the direction of Franklin Federal i.e., Franklin Federal and Putnam Short go up and down completely randomly.
Pair Corralation between Franklin Federal and Putnam Short
If you would invest 1,029 in Franklin Federal Limited Term on September 1, 2024 and sell it today you would earn a total of 5.00 from holding Franklin Federal Limited Term or generate 0.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Federal Limited Term vs. Putnam Short Duration
Performance |
| Timeline |
| Franklin Federal Lim |
| Putnam Short Duration |
Franklin Federal and Putnam Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Federal and Putnam Short
The main advantage of trading using opposite Franklin Federal and Putnam Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Federal position performs unexpectedly, Putnam Short 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 Short will offset losses from the drop in Putnam Short's long position.| Franklin Federal vs. Small Midcap Dividend Income | Franklin Federal vs. Tax Managed Mid Small | Franklin Federal vs. Touchstone Small Cap | Franklin Federal vs. Jpmorgan Small Cap |
| Putnam Short vs. Touchstone Ultra Short | Putnam Short vs. Ultra Short Fixed Income | Putnam Short vs. Quantitative Longshort Equity | Putnam Short vs. Franklin Federal Limited Term |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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