Correlation Between Invesco High and Putnam Managed
Can any of the company-specific risk be diversified away by investing in both Invesco High and Putnam Managed 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 Invesco High and Putnam Managed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco High Income and Putnam Managed Municipal, you can compare the effects of market volatilities on Invesco High and Putnam Managed 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 Invesco High with a short position of Putnam Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco High and Putnam Managed.
Diversification Opportunities for Invesco High and Putnam Managed
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Invesco and Putnam is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Invesco High Income and Putnam Managed Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Managed Municipal and Invesco 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 Invesco High Income are associated (or correlated) with Putnam Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Managed Municipal has no effect on the direction of Invesco High i.e., Invesco High and Putnam Managed go up and down completely randomly.
Pair Corralation between Invesco High and Putnam Managed
Given the investment horizon of 90 days Invesco High is expected to generate 2.47 times less return on investment than Putnam Managed. But when comparing it to its historical volatility, Invesco High Income is 7.72 times less risky than Putnam Managed. It trades about 0.31 of its potential returns per unit of risk. Putnam Managed Municipal is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 626.00 in Putnam Managed Municipal on September 1, 2024 and sell it today you would earn a total of 10.00 from holding Putnam Managed Municipal or generate 1.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco High Income vs. Putnam Managed Municipal
Performance |
| Timeline |
| Invesco High Income |
| Putnam Managed Municipal |
Invesco High and Putnam Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco High and Putnam Managed
The main advantage of trading using opposite Invesco High and Putnam Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco High position performs unexpectedly, Putnam Managed 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 Managed will offset losses from the drop in Putnam Managed's long position.| Invesco High vs. MFS Investment Grade | Invesco High vs. Eaton Vance National | Invesco High vs. Nuveen California Select | Invesco High vs. Federated Premier Municipal |
| Putnam Managed vs. MFS Investment Grade | Putnam Managed vs. Eaton Vance National | Putnam Managed vs. Blackrock Munivest | Putnam Managed vs. DTF Tax Free |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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