Correlation Between Nuveen Senior and Putnam Managed
Can any of the company-specific risk be diversified away by investing in both Nuveen Senior and Putnam Managed 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 Nuveen Senior and Putnam Managed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nuveen Senior Income and Putnam Managed Municipal, you can compare the effects of market volatilities on Nuveen Senior and Putnam Managed 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 Nuveen Senior with a short position of Putnam Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Senior and Putnam Managed.
Diversification Opportunities for Nuveen Senior and Putnam Managed
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Nuveen and Putnam is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Senior Income and Putnam Managed Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Managed Municipal and Nuveen Senior 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 Nuveen Senior Income are associated (or correlated) with Putnam Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Managed Municipal has no effect on the direction of Nuveen Senior i.e., Nuveen Senior and Putnam Managed go up and down completely randomly.
Pair Corralation between Nuveen Senior and Putnam Managed
Considering the 90-day investment horizon Nuveen Senior Income is expected to generate 0.57 times more return on investment than Putnam Managed. However, Nuveen Senior Income is 1.76 times less risky than Putnam Managed. It trades about 0.14 of its potential returns per unit of risk. Putnam Managed Municipal is currently generating about 0.05 per unit of risk. If you would invest 446.00 in Nuveen Senior Income on August 31, 2024 and sell it today you would earn a total of 10.00 from holding Nuveen Senior Income or generate 2.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 8.56% |
| Values | Daily Returns |
Nuveen Senior Income vs. Putnam Managed Municipal
Performance |
| Timeline |
| Nuveen Senior Income |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Putnam Managed Municipal |
Nuveen Senior and Putnam Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen Senior and Putnam Managed
The main advantage of trading using opposite Nuveen Senior and Putnam Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Senior position performs unexpectedly, Putnam Managed 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 Managed will offset losses from the drop in Putnam Managed's long position.| Nuveen Senior vs. Nuveen Floating Rate | Nuveen Senior vs. Pioneer Floating Rate | Nuveen Senior vs. BlackRock Floating Rate | Nuveen Senior vs. Blackrock Floating Rate |
| Putnam Managed vs. MFS Investment Grade | Putnam Managed vs. Eaton Vance National | Putnam Managed vs. Blackrock Munivest | Putnam Managed vs. DTF Tax Free |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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