Correlation Between The Hartford and Putnam Short
Can any of the company-specific risk be diversified away by investing in both The Hartford 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 The Hartford and Putnam Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Hartford Emerging and Putnam Short Duration, you can compare the effects of market volatilities on The Hartford 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 The Hartford with a short position of Putnam Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Hartford and Putnam Short.
Diversification Opportunities for The Hartford and Putnam Short
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between The and Putnam is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Emerging 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 The Hartford 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 The Hartford Emerging 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 The Hartford i.e., The Hartford and Putnam Short go up and down completely randomly.
Pair Corralation between The Hartford and Putnam Short
Assuming the 90 days horizon The Hartford is expected to generate 4.93 times less return on investment than Putnam Short. In addition to that, The Hartford is 4.31 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 0.22 per unit of volatility. If you would invest 983.00 in Putnam Short Duration on August 28, 2024 and sell it today you would earn a total of 27.00 from holding Putnam Short Duration or generate 2.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Hartford Emerging vs. Putnam Short Duration
Performance |
| Timeline |
| Hartford Emerging |
| Putnam Short Duration |
The Hartford and Putnam Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with The Hartford and Putnam Short
The main advantage of trading using opposite The Hartford and Putnam Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Hartford 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.| The Hartford vs. Nasdaq 100 2x Strategy | The Hartford vs. Siit Emerging Markets | The Hartford vs. Investec Emerging Markets | The Hartford vs. Western Assets Emerging |
| 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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