Correlation Between Small Pany and Putnam Floating
Can any of the company-specific risk be diversified away by investing in both Small Pany 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 Small Pany and Putnam Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Small Pany Growth and Putnam Floating Rate, you can compare the effects of market volatilities on Small Pany 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 Small Pany with a short position of Putnam Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Small Pany and Putnam Floating.
Diversification Opportunities for Small Pany and Putnam Floating
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Small and Putnam is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Small Pany Growth 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 Small Pany 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 Pany Growth 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 Small Pany i.e., Small Pany and Putnam Floating go up and down completely randomly.
Pair Corralation between Small Pany and Putnam Floating
Assuming the 90 days horizon Small Pany Growth is expected to generate 14.74 times more return on investment than Putnam Floating. However, Small Pany is 14.74 times more volatile than Putnam Floating Rate. It trades about 0.57 of its potential returns per unit of risk. Putnam Floating Rate is currently generating about 0.25 per unit of risk. If you would invest 1,299 in Small Pany Growth on August 29, 2024 and sell it today you would earn a total of 351.00 from holding Small Pany Growth or generate 27.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Small Pany Growth vs. Putnam Floating Rate
Performance |
| Timeline |
| Small Pany Growth |
| Putnam Floating Rate |
Small Pany and Putnam Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Small Pany and Putnam Floating
The main advantage of trading using opposite Small Pany and Putnam Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Small Pany 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.| Small Pany vs. Putnam Equity Income | Small Pany vs. Putnam Growth Opportunities | Small Pany vs. HUMANA INC | Small Pany vs. Aquagold International |
| Putnam Floating vs. Floating Rate Fund | Putnam Floating vs. Lord Abbett Inv | Putnam Floating vs. HUMANA INC | Putnam Floating vs. Aquagold International |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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