Correlation Between Mesirow Financial and Putnam Dynamic
Can any of the company-specific risk be diversified away by investing in both Mesirow Financial and Putnam Dynamic 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 Mesirow Financial and Putnam Dynamic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mesirow Financial Small and Putnam Dynamic Asset, you can compare the effects of market volatilities on Mesirow Financial and Putnam Dynamic 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 Mesirow Financial with a short position of Putnam Dynamic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mesirow Financial and Putnam Dynamic.
Diversification Opportunities for Mesirow Financial and Putnam Dynamic
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Mesirow and Putnam is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Mesirow Financial Small and Putnam Dynamic Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Dynamic Asset and Mesirow Financial 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 Mesirow Financial Small are associated (or correlated) with Putnam Dynamic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Dynamic Asset has no effect on the direction of Mesirow Financial i.e., Mesirow Financial and Putnam Dynamic go up and down completely randomly.
Pair Corralation between Mesirow Financial and Putnam Dynamic
Assuming the 90 days horizon Mesirow Financial Small is expected to generate 2.33 times more return on investment than Putnam Dynamic. However, Mesirow Financial is 2.33 times more volatile than Putnam Dynamic Asset. It trades about 0.13 of its potential returns per unit of risk. Putnam Dynamic Asset is currently generating about 0.17 per unit of risk. If you would invest 1,319 in Mesirow Financial Small on September 4, 2024 and sell it today you would earn a total of 113.00 from holding Mesirow Financial Small or generate 8.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mesirow Financial Small vs. Putnam Dynamic Asset
Performance |
| Timeline |
| Mesirow Financial Small |
| Putnam Dynamic Asset |
Mesirow Financial and Putnam Dynamic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mesirow Financial and Putnam Dynamic
The main advantage of trading using opposite Mesirow Financial and Putnam Dynamic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mesirow Financial position performs unexpectedly, Putnam Dynamic 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 Dynamic will offset losses from the drop in Putnam Dynamic's long position.| Mesirow Financial vs. Ab Global Risk | Mesirow Financial vs. Guggenheim High Yield | Mesirow Financial vs. Siit High Yield | Mesirow Financial vs. Pioneer High Yield |
| Putnam Dynamic vs. Gabelli Global Financial | Putnam Dynamic vs. Davis Financial Fund | Putnam Dynamic vs. Angel Oak Financial | Putnam Dynamic vs. Mesirow Financial Small |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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