Correlation Between Putnam Retirement and Lazard Strategic
Can any of the company-specific risk be diversified away by investing in both Putnam Retirement and Lazard Strategic 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 Lazard Strategic 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 Lazard Strategic Equity, you can compare the effects of market volatilities on Putnam Retirement and Lazard Strategic 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 Lazard Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Retirement and Lazard Strategic.
Diversification Opportunities for Putnam Retirement and Lazard Strategic
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Putnam and Lazard is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Retirement Advantage and Lazard Strategic Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lazard Strategic Equity 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 Lazard Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lazard Strategic Equity has no effect on the direction of Putnam Retirement i.e., Putnam Retirement and Lazard Strategic go up and down completely randomly.
Pair Corralation between Putnam Retirement and Lazard Strategic
Assuming the 90 days horizon Putnam Retirement Advantage is expected to generate 1.14 times more return on investment than Lazard Strategic. However, Putnam Retirement is 1.14 times more volatile than Lazard Strategic Equity. It trades about -0.32 of its potential returns per unit of risk. Lazard Strategic Equity is currently generating about -0.39 per unit of risk. If you would invest 1,282 in Putnam Retirement Advantage on October 15, 2024 and sell it today you would lose (112.00) from holding Putnam Retirement Advantage or give up 8.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putnam Retirement Advantage vs. Lazard Strategic Equity
Performance |
| Timeline |
| Putnam Retirement |
| Lazard Strategic Equity |
Putnam Retirement and Lazard Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Retirement and Lazard Strategic
The main advantage of trading using opposite Putnam Retirement and Lazard Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Retirement position performs unexpectedly, Lazard Strategic 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 Lazard Strategic will offset losses from the drop in Lazard Strategic's long position.| Putnam Retirement vs. Putnam Equity Income | Putnam Retirement vs. Putnam Tax Exempt | Putnam Retirement vs. Putnam Floating Rate | Putnam Retirement 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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