Correlation Between Putnam High and Sterling Capital
Can any of the company-specific risk be diversified away by investing in both Putnam High and Sterling Capital 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 High and Sterling Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Putnam High Income and Sterling Capital Total, you can compare the effects of market volatilities on Putnam High and Sterling Capital 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 High with a short position of Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam High and Sterling Capital.
Diversification Opportunities for Putnam High and Sterling Capital
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Putnam and Sterling is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Putnam High Income and Sterling Capital Total in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Capital Total and Putnam High 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 High Income are associated (or correlated) with Sterling Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sterling Capital Total has no effect on the direction of Putnam High i.e., Putnam High and Sterling Capital go up and down completely randomly.
Pair Corralation between Putnam High and Sterling Capital
Considering the 90-day investment horizon Putnam High Income is expected to generate 2.79 times more return on investment than Sterling Capital. However, Putnam High is 2.79 times more volatile than Sterling Capital Total. It trades about 0.06 of its potential returns per unit of risk. Sterling Capital Total is currently generating about 0.01 per unit of risk. If you would invest 669.00 in Putnam High Income on September 13, 2024 and sell it today you would earn a total of 9.00 from holding Putnam High Income or generate 1.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.67% |
| Values | Daily Returns |
Putnam High Income vs. Sterling Capital Total
Performance |
| Timeline |
| Putnam High Income |
| Sterling Capital Total |
Putnam High and Sterling Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam High and Sterling Capital
The main advantage of trading using opposite Putnam High and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam High position performs unexpectedly, Sterling Capital 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 Sterling Capital will offset losses from the drop in Sterling Capital's long position.| Putnam High vs. RiverNorthDoubleLine Strategic Opportunity | Putnam High vs. Cornerstone Strategic Return | Putnam High vs. Oxford Lane Capital | Putnam High vs. Horizon Technology Finance |
| Sterling Capital vs. Barings Active Short | Sterling Capital vs. Easterly Snow Longshort | Sterling Capital vs. Rbc Short Duration | Sterling Capital vs. Kentucky Tax Free Short To Medium |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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