Correlation Between IShares MSCI and Putnam Focused
Can any of the company-specific risk be diversified away by investing in both IShares MSCI and Putnam Focused 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 IShares MSCI and Putnam Focused into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares MSCI USA and Putnam Focused Large, you can compare the effects of market volatilities on IShares MSCI and Putnam Focused 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 IShares MSCI with a short position of Putnam Focused. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares MSCI and Putnam Focused.
Diversification Opportunities for IShares MSCI and Putnam Focused
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and Putnam is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI USA and Putnam Focused Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Focused Large and IShares MSCI 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 iShares MSCI USA are associated (or correlated) with Putnam Focused. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Focused Large has no effect on the direction of IShares MSCI i.e., IShares MSCI and Putnam Focused go up and down completely randomly.
Pair Corralation between IShares MSCI and Putnam Focused
Given the investment horizon of 90 days iShares MSCI USA is expected to generate 0.98 times more return on investment than Putnam Focused. However, iShares MSCI USA is 1.02 times less risky than Putnam Focused. It trades about 0.11 of its potential returns per unit of risk. Putnam Focused Large is currently generating about 0.09 per unit of risk. If you would invest 18,568 in iShares MSCI USA on September 1, 2024 and sell it today you would earn a total of 3,084 from holding iShares MSCI USA or generate 16.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
iShares MSCI USA vs. Putnam Focused Large
Performance |
| Timeline |
| iShares MSCI USA |
| Putnam Focused Large |
IShares MSCI and Putnam Focused Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares MSCI and Putnam Focused
The main advantage of trading using opposite IShares MSCI and Putnam Focused positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares MSCI position performs unexpectedly, Putnam Focused 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 Focused will offset losses from the drop in Putnam Focused's long position.| IShares MSCI vs. iShares MSCI USA | IShares MSCI vs. iShares MSCI USA | IShares MSCI vs. iShares MSCI USA | IShares MSCI vs. iShares Expanded Tech Software |
| Putnam Focused vs. Vanguard Growth Index | Putnam Focused vs. iShares Russell 1000 | Putnam Focused vs. iShares SP 500 | Putnam Focused vs. iShares Core SP |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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