Correlation Between Putnam Retirement and Dimensional Retirement
Can any of the company-specific risk be diversified away by investing in both Putnam Retirement and Dimensional Retirement 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 Dimensional Retirement 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 Dimensional Retirement Income, you can compare the effects of market volatilities on Putnam Retirement and Dimensional Retirement 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 Dimensional Retirement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Retirement and Dimensional Retirement.
Diversification Opportunities for Putnam Retirement and Dimensional Retirement
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Putnam and Dimensional is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Retirement Advantage and Dimensional Retirement Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dimensional Retirement 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 Dimensional Retirement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dimensional Retirement has no effect on the direction of Putnam Retirement i.e., Putnam Retirement and Dimensional Retirement go up and down completely randomly.
Pair Corralation between Putnam Retirement and Dimensional Retirement
Assuming the 90 days horizon Putnam Retirement Advantage is expected to under-perform the Dimensional Retirement. In addition to that, Putnam Retirement is 4.89 times more volatile than Dimensional Retirement Income. It trades about -0.22 of its total potential returns per unit of risk. Dimensional Retirement Income is currently generating about -0.33 per unit of volatility. If you would invest 1,167 in Dimensional Retirement Income on October 10, 2024 and sell it today you would lose (24.00) from holding Dimensional Retirement Income or give up 2.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putnam Retirement Advantage vs. Dimensional Retirement Income
Performance |
| Timeline |
| Putnam Retirement |
| Dimensional Retirement |
Putnam Retirement and Dimensional Retirement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Retirement and Dimensional Retirement
The main advantage of trading using opposite Putnam Retirement and Dimensional Retirement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Retirement position performs unexpectedly, Dimensional Retirement 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 Dimensional Retirement will offset losses from the drop in Dimensional Retirement's long position.| Putnam Retirement vs. Columbia Real Estate | Putnam Retirement vs. Neuberger Berman Real | Putnam Retirement vs. Vy Clarion Real | Putnam Retirement vs. Deutsche Real Estate |
| Dimensional Retirement vs. Ab Small Cap | Dimensional Retirement vs. Vy Columbia Small | Dimensional Retirement vs. Ab Small Cap | Dimensional Retirement vs. Artisan Small Cap |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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