Correlation Between Gmo High and Putman Absolute
Can any of the company-specific risk be diversified away by investing in both Gmo High and Putman Absolute 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 High and Putman Absolute into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gmo High Yield and Putman Absolute Return, you can compare the effects of market volatilities on Gmo High and Putman Absolute 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 High with a short position of Putman Absolute. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gmo High and Putman Absolute.
Diversification Opportunities for Gmo High and Putman Absolute
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Gmo and Putman is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Gmo High Yield and Putman Absolute Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putman Absolute Return and Gmo High 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 High Yield are associated (or correlated) with Putman Absolute. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putman Absolute Return has no effect on the direction of Gmo High i.e., Gmo High and Putman Absolute go up and down completely randomly.
Pair Corralation between Gmo High and Putman Absolute
Assuming the 90 days horizon Gmo High Yield is expected to generate 0.78 times more return on investment than Putman Absolute. However, Gmo High Yield is 1.28 times less risky than Putman Absolute. It trades about 0.17 of its potential returns per unit of risk. Putman Absolute Return is currently generating about 0.07 per unit of risk. If you would invest 1,545 in Gmo High Yield on September 12, 2024 and sell it today you would earn a total of 267.00 from holding Gmo High Yield or generate 17.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gmo High Yield vs. Putman Absolute Return
Performance |
| Timeline |
| Gmo High Yield |
| Putman Absolute Return |
Gmo High and Putman Absolute Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gmo High and Putman Absolute
The main advantage of trading using opposite Gmo High and Putman Absolute positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gmo High position performs unexpectedly, Putman Absolute 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 Putman Absolute will offset losses from the drop in Putman Absolute's long position.| Gmo High vs. Artisan High Income | Gmo High vs. Blackrock High Yield | Gmo High vs. Pax High Yield | Gmo High vs. Msift High Yield |
| Putman Absolute vs. SCOR PK | Putman Absolute vs. Morningstar Unconstrained Allocation | Putman Absolute vs. Via Renewables | Putman Absolute vs. Bondbloxx ETF Trust |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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