Correlation Between Putnam High and MFS Investment
Can any of the company-specific risk be diversified away by investing in both Putnam High and MFS Investment 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 MFS Investment 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 MFS Investment Grade, you can compare the effects of market volatilities on Putnam High and MFS Investment 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 MFS Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam High and MFS Investment.
Diversification Opportunities for Putnam High and MFS Investment
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Putnam and MFS is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Putnam High Income and MFS Investment Grade in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFS Investment Grade 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 MFS Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MFS Investment Grade has no effect on the direction of Putnam High i.e., Putnam High and MFS Investment go up and down completely randomly.
Pair Corralation between Putnam High and MFS Investment
Considering the 90-day investment horizon Putnam High Income is expected to generate 0.87 times more return on investment than MFS Investment. However, Putnam High Income is 1.14 times less risky than MFS Investment. It trades about 0.18 of its potential returns per unit of risk. MFS Investment Grade is currently generating about 0.11 per unit of risk. If you would invest 660.00 in Putnam High Income on August 28, 2024 and sell it today you would earn a total of 12.00 from holding Putnam High Income or generate 1.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putnam High Income vs. MFS Investment Grade
Performance |
| Timeline |
| Putnam High Income |
| MFS Investment Grade |
Putnam High and MFS Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam High and MFS Investment
The main advantage of trading using opposite Putnam High and MFS Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam High position performs unexpectedly, MFS Investment 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 MFS Investment will offset losses from the drop in MFS Investment'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 |
| MFS Investment vs. PowerUp Acquisition Corp | MFS Investment vs. Aurora Innovation | MFS Investment vs. HUMANA INC | MFS Investment vs. Aquagold International |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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