Correlation Between Putnam Retirement and Moderate Duration
Can any of the company-specific risk be diversified away by investing in both Putnam Retirement and Moderate Duration 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 Retirement and Moderate Duration into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Putnam Retirement Advantage and Moderate Duration Fund, you can compare the effects of market volatilities on Putnam Retirement and Moderate Duration 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 Retirement with a short position of Moderate Duration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Retirement and Moderate Duration.
Diversification Opportunities for Putnam Retirement and Moderate Duration
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Putnam and Moderate is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Retirement Advantage and Moderate Duration Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moderate Duration and Putnam Retirement 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 Retirement Advantage are associated (or correlated) with Moderate Duration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moderate Duration has no effect on the direction of Putnam Retirement i.e., Putnam Retirement and Moderate Duration go up and down completely randomly.
Pair Corralation between Putnam Retirement and Moderate Duration
Assuming the 90 days horizon Putnam Retirement is expected to generate 4.14 times less return on investment than Moderate Duration. In addition to that, Putnam Retirement is 3.99 times more volatile than Moderate Duration Fund. It trades about 0.01 of its total potential returns per unit of risk. Moderate Duration Fund is currently generating about 0.15 per unit of volatility. If you would invest 910.00 in Moderate Duration Fund on October 25, 2024 and sell it today you would earn a total of 6.00 from holding Moderate Duration Fund or generate 0.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Putnam Retirement Advantage vs. Moderate Duration Fund
Performance |
| Timeline |
| Putnam Retirement |
| Moderate Duration |
Putnam Retirement and Moderate Duration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Retirement and Moderate Duration
The main advantage of trading using opposite Putnam Retirement and Moderate Duration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Retirement position performs unexpectedly, Moderate Duration 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 Moderate Duration will offset losses from the drop in Moderate Duration's long position.| Putnam Retirement vs. Fidelity Freedom Index | Putnam Retirement vs. Fidelity Freedom 2060 | Putnam Retirement vs. HUMANA INC | Putnam Retirement vs. Aquagold International |
| Moderate Duration vs. California Bond Fund | Moderate Duration vs. Intermediate Term Tax Free Bond | Moderate Duration vs. Multisector Bond Sma | Moderate Duration vs. T Rowe Price |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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