Correlation Between Putnam Retirement and High Yield
Can any of the company-specific risk be diversified away by investing in both Putnam Retirement and High Yield 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 High Yield 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 High Yield Fund, you can compare the effects of market volatilities on Putnam Retirement and High Yield 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 High Yield. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Retirement and High Yield.
Diversification Opportunities for Putnam Retirement and High Yield
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Putnam and High is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Retirement Advantage and High Yield Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Yield Fund 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 High Yield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High Yield Fund has no effect on the direction of Putnam Retirement i.e., Putnam Retirement and High Yield go up and down completely randomly.
Pair Corralation between Putnam Retirement and High Yield
Assuming the 90 days horizon Putnam Retirement Advantage is expected to under-perform the High Yield. In addition to that, Putnam Retirement is 5.97 times more volatile than High Yield Fund. It trades about -0.21 of its total potential returns per unit of risk. High Yield Fund is currently generating about -0.26 per unit of volatility. If you would invest 782.00 in High Yield Fund on October 11, 2024 and sell it today you would lose (10.00) from holding High Yield Fund or give up 1.28% 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. High Yield Fund
Performance |
| Timeline |
| Putnam Retirement |
| High Yield Fund |
Putnam Retirement and High Yield Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Retirement and High Yield
The main advantage of trading using opposite Putnam Retirement and High Yield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Retirement position performs unexpectedly, High Yield 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 High Yield will offset losses from the drop in High Yield's long position.| Putnam Retirement vs. Barings High Yield | Putnam Retirement vs. Fidelity Focused High | Putnam Retirement vs. Needham Aggressive Growth | Putnam Retirement vs. Millerhoward High Income |
| High Yield vs. Tiaa Cref Lifestyle Moderate | High Yield vs. Jp Morgan Smartretirement | High Yield vs. Putnam Retirement Advantage | High Yield vs. Qs Moderate Growth |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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