Correlation Between Putnam Dynamic and Putnam Short
Can any of the company-specific risk be diversified away by investing in both Putnam Dynamic and Putnam Short 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 Putnam Dynamic and Putnam Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Putnam Dynamic Asset and Putnam Short Duration, you can compare the effects of market volatilities on Putnam Dynamic and Putnam Short 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 Putnam Dynamic with a short position of Putnam Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Dynamic and Putnam Short.
Diversification Opportunities for Putnam Dynamic and Putnam Short
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Putnam and Putnam is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Dynamic Asset and Putnam Short Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Short Duration and Putnam Dynamic 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 Putnam Dynamic Asset are associated (or correlated) with Putnam Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Short Duration has no effect on the direction of Putnam Dynamic i.e., Putnam Dynamic and Putnam Short go up and down completely randomly.
Pair Corralation between Putnam Dynamic and Putnam Short
Assuming the 90 days horizon Putnam Dynamic Asset is expected to generate 5.46 times more return on investment than Putnam Short. However, Putnam Dynamic is 5.46 times more volatile than Putnam Short Duration. It trades about 0.12 of its potential returns per unit of risk. Putnam Short Duration is currently generating about 0.21 per unit of risk. If you would invest 1,295 in Putnam Dynamic Asset on August 28, 2024 and sell it today you would earn a total of 449.00 from holding Putnam Dynamic Asset or generate 34.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putnam Dynamic Asset vs. Putnam Short Duration
Performance |
| Timeline |
| Putnam Dynamic Asset |
| Putnam Short Duration |
Putnam Dynamic and Putnam Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Dynamic and Putnam Short
The main advantage of trading using opposite Putnam Dynamic and Putnam Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Dynamic position performs unexpectedly, Putnam Short 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 Short will offset losses from the drop in Putnam Short's long position.| Putnam Dynamic vs. Putnam Equity Income | Putnam Dynamic vs. Putnam Tax Exempt | Putnam Dynamic vs. Putnam Floating Rate | Putnam Dynamic vs. Putnam High Yield |
| Putnam Short vs. Putnam Equity Income | Putnam Short vs. Putnam Tax Exempt | Putnam Short vs. Putnam Floating Rate | Putnam Short vs. Putnam High Yield |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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