Correlation Between Nuveen California and Putnam Managed
Can any of the company-specific risk be diversified away by investing in both Nuveen California 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 California 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 California Select and Putnam Managed Municipal, you can compare the effects of market volatilities on Nuveen California 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 California with a short position of Putnam Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen California and Putnam Managed.
Diversification Opportunities for Nuveen California and Putnam Managed
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nuveen and Putnam is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen California Select 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 California 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 California Select 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 California i.e., Nuveen California and Putnam Managed go up and down completely randomly.
Pair Corralation between Nuveen California and Putnam Managed
Considering the 90-day investment horizon Nuveen California Select is expected to under-perform the Putnam Managed. But the stock apears to be less risky and, when comparing its historical volatility, Nuveen California Select is 1.02 times less risky than Putnam Managed. The stock trades about -0.06 of its potential returns per unit of risk. The Putnam Managed Municipal is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 620.00 in Putnam Managed Municipal on August 29, 2024 and sell it today you would earn a total of 1.00 from holding Putnam Managed Municipal or generate 0.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nuveen California Select vs. Putnam Managed Municipal
Performance |
| Timeline |
| Nuveen California Select |
| Putnam Managed Municipal |
Nuveen California and Putnam Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen California and Putnam Managed
The main advantage of trading using opposite Nuveen California and Putnam Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen California 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 California vs. Eaton Vance National | Nuveen California vs. Invesco High Income | Nuveen California vs. Blackrock Muniholdings Ny | Nuveen California vs. MFS Investment Grade |
| 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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