Correlation Between Small Cap and Putnam Money
Can any of the company-specific risk be diversified away by investing in both Small Cap and Putnam Money 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 Small Cap and Putnam Money into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Small Cap Equity and Putnam Money Market, you can compare the effects of market volatilities on Small Cap and Putnam Money 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 Small Cap with a short position of Putnam Money. Check out your portfolio center. Please also check ongoing floating volatility patterns of Small Cap and Putnam Money.
Diversification Opportunities for Small Cap and Putnam Money
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Small and Putnam is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Small Cap Equity and Putnam Money Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Money Market and Small Cap 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 Small Cap Equity are associated (or correlated) with Putnam Money. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Money Market has no effect on the direction of Small Cap i.e., Small Cap and Putnam Money go up and down completely randomly.
Pair Corralation between Small Cap and Putnam Money
If you would invest 100.00 in Putnam Money Market on October 17, 2024 and sell it today you would earn a total of 0.00 from holding Putnam Money Market or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Small Cap Equity vs. Putnam Money Market
Performance |
| Timeline |
| Small Cap Equity |
| Putnam Money Market |
Small Cap and Putnam Money Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Small Cap and Putnam Money
The main advantage of trading using opposite Small Cap and Putnam Money positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Small Cap position performs unexpectedly, Putnam Money 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 Money will offset losses from the drop in Putnam Money's long position.| Small Cap vs. Pace International Equity | Small Cap vs. Morningstar International Equity | Small Cap vs. Guidemark E Fixed | Small Cap vs. Franklin Equity Income |
| Putnam Money vs. Dws Equity Sector | Putnam Money vs. Enhanced Fixed Income | Putnam Money vs. T Rowe Price | Putnam Money vs. Small Cap Equity |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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