Correlation Between Edward Jones and Putnam Money
Can any of the company-specific risk be diversified away by investing in both Edward Jones 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 Edward Jones and Putnam Money into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Edward Jones Money and Putnam Money Market, you can compare the effects of market volatilities on Edward Jones 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 Edward Jones with a short position of Putnam Money. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edward Jones and Putnam Money.
Diversification Opportunities for Edward Jones and Putnam Money
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Edward and Putnam is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Edward Jones Money 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 Edward Jones 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 Edward Jones Money 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 Edward Jones i.e., Edward Jones and Putnam Money go up and down completely randomly.
Pair Corralation between Edward Jones and Putnam Money
Assuming the 90 days horizon Edward Jones Money is expected to generate 18.32 times more return on investment than Putnam Money. However, Edward Jones is 18.32 times more volatile than Putnam Money Market. It trades about 0.03 of its potential returns per unit of risk. Putnam Money Market is currently generating about 0.03 per unit of risk. If you would invest 95.00 in Edward Jones Money on August 24, 2024 and sell it today you would earn a total of 5.00 from holding Edward Jones Money or generate 5.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Edward Jones Money vs. Putnam Money Market
Performance |
| Timeline |
| Edward Jones Money |
| Putnam Money Market |
Edward Jones and Putnam Money Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Edward Jones and Putnam Money
The main advantage of trading using opposite Edward Jones and Putnam Money positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edward Jones 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.| Edward Jones vs. Qs Large Cap | Edward Jones vs. Federated Mdt Large | Edward Jones vs. Aqr Large Cap | Edward Jones vs. Knights Of Umbus |
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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 CEOs Directory module to screen CEOs from public companies around the world.
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