Correlation Between Gmo Resources and Putnam Short
Can any of the company-specific risk be diversified away by investing in both Gmo Resources 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 Gmo Resources and Putnam Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gmo Resources and Putnam Short Duration, you can compare the effects of market volatilities on Gmo Resources 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 Gmo Resources with a short position of Putnam Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gmo Resources and Putnam Short.
Diversification Opportunities for Gmo Resources and Putnam Short
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Gmo and Putnam is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Gmo Resources 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 Gmo Resources 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 Resources 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 Gmo Resources i.e., Gmo Resources and Putnam Short go up and down completely randomly.
Pair Corralation between Gmo Resources and Putnam Short
Assuming the 90 days horizon Gmo Resources is expected to under-perform the Putnam Short. In addition to that, Gmo Resources is 13.25 times more volatile than Putnam Short Duration. It trades about -0.01 of its total potential returns per unit of risk. Putnam Short Duration is currently generating about 0.23 per unit of volatility. If you would invest 949.00 in Putnam Short Duration on September 4, 2024 and sell it today you would earn a total of 65.00 from holding Putnam Short Duration or generate 6.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gmo Resources vs. Putnam Short Duration
Performance |
| Timeline |
| Gmo Resources |
| Putnam Short Duration |
Gmo Resources and Putnam Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gmo Resources and Putnam Short
The main advantage of trading using opposite Gmo Resources and Putnam Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gmo Resources 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.| Gmo Resources vs. Gmo E Plus | Gmo Resources vs. Gmo Trust | Gmo Resources vs. Gmo Treasury Fund | Gmo Resources vs. Gmo Trust |
| Putnam Short vs. Putnam Equity Income | Putnam Short vs. Putnam Tax Exempt | Putnam Short vs. Putnam Floating Rate | Putnam Short vs. Putnam 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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