Correlation Between Live Oak and Putnam Floating
Can any of the company-specific risk be diversified away by investing in both Live Oak and Putnam Floating 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 Live Oak and Putnam Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Live Oak Health and Putnam Floating Rate, you can compare the effects of market volatilities on Live Oak and Putnam Floating 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 Live Oak with a short position of Putnam Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Oak and Putnam Floating.
Diversification Opportunities for Live Oak and Putnam Floating
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between LIVE and Putnam is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Live Oak Health and Putnam Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Floating Rate and Live Oak 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 Live Oak Health are associated (or correlated) with Putnam Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Floating Rate has no effect on the direction of Live Oak i.e., Live Oak and Putnam Floating go up and down completely randomly.
Pair Corralation between Live Oak and Putnam Floating
Assuming the 90 days horizon Live Oak Health is expected to generate 8.19 times more return on investment than Putnam Floating. However, Live Oak is 8.19 times more volatile than Putnam Floating Rate. It trades about 0.05 of its potential returns per unit of risk. Putnam Floating Rate is currently generating about 0.28 per unit of risk. If you would invest 2,165 in Live Oak Health on August 24, 2024 and sell it today you would earn a total of 21.00 from holding Live Oak Health or generate 0.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Live Oak Health vs. Putnam Floating Rate
Performance |
| Timeline |
| Live Oak Health |
| Putnam Floating Rate |
Live Oak and Putnam Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Oak and Putnam Floating
The main advantage of trading using opposite Live Oak and Putnam Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Oak position performs unexpectedly, Putnam Floating 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 Floating will offset losses from the drop in Putnam Floating's long position.| Live Oak vs. Black Oak Emerging | Live Oak vs. Pin Oak Equity | Live Oak vs. Red Oak Technology | Live Oak vs. White Oak Select |
| Putnam Floating vs. Scharf Global Opportunity | Putnam Floating vs. Kinetics Global Fund | Putnam Floating vs. Morgan Stanley Global | Putnam Floating vs. Ab Global Bond |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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