Correlation Between Gmo Alternative and Putnam High
Can any of the company-specific risk be diversified away by investing in both Gmo Alternative 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 Gmo Alternative and Putnam High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gmo Alternative Allocation and Putnam High Yield, you can compare the effects of market volatilities on Gmo Alternative 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 Gmo Alternative with a short position of Putnam High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gmo Alternative and Putnam High.
Diversification Opportunities for Gmo Alternative and Putnam High
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gmo and Putnam is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Gmo Alternative Allocation 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 Gmo Alternative 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 Gmo Alternative Allocation 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 Gmo Alternative i.e., Gmo Alternative and Putnam High go up and down completely randomly.
Pair Corralation between Gmo Alternative and Putnam High
Assuming the 90 days horizon Gmo Alternative Allocation is expected to under-perform the Putnam High. In addition to that, Gmo Alternative is 2.25 times more volatile than Putnam High Yield. It trades about -0.23 of its total potential returns per unit of risk. Putnam High Yield is currently generating about 0.11 per unit of volatility. If you would invest 537.00 in Putnam High Yield on August 28, 2024 and sell it today you would earn a total of 2.00 from holding Putnam High Yield or generate 0.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gmo Alternative Allocation vs. Putnam High Yield
Performance |
| Timeline |
| Gmo Alternative Allo |
| Putnam High Yield |
Gmo Alternative and Putnam High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gmo Alternative and Putnam High
The main advantage of trading using opposite Gmo Alternative and Putnam High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gmo Alternative 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.| Gmo Alternative vs. Gmo E Plus | Gmo Alternative vs. Gmo Trust | Gmo Alternative vs. Gmo Treasury Fund | Gmo Alternative vs. Gmo Trust |
| Putnam High vs. Putnam Equity Income | Putnam High vs. Putnam Tax Exempt | Putnam High vs. Putnam Floating Rate | Putnam High vs. Putnam Floating Rate |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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