Correlation Between Putnam High and Eaton Vance
Can any of the company-specific risk be diversified away by investing in both Putnam High and Eaton Vance 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 Eaton Vance 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 Eaton Vance Senior, you can compare the effects of market volatilities on Putnam High and Eaton Vance 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 Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam High and Eaton Vance.
Diversification Opportunities for Putnam High and Eaton Vance
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Putnam and Eaton is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Putnam High Income and Eaton Vance Senior in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Senior 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 Eaton Vance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eaton Vance Senior has no effect on the direction of Putnam High i.e., Putnam High and Eaton Vance go up and down completely randomly.
Pair Corralation between Putnam High and Eaton Vance
Considering the 90-day investment horizon Putnam High Income is expected to generate 1.05 times more return on investment than Eaton Vance. However, Putnam High is 1.05 times more volatile than Eaton Vance Senior. It trades about 0.22 of its potential returns per unit of risk. Eaton Vance Senior is currently generating about 0.12 per unit of risk. If you would invest 660.00 in Putnam High Income on August 29, 2024 and sell it today you would earn a total of 15.00 from holding Putnam High Income or generate 2.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putnam High Income vs. Eaton Vance Senior
Performance |
| Timeline |
| Putnam High Income |
| Eaton Vance Senior |
Putnam High and Eaton Vance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam High and Eaton Vance
The main advantage of trading using opposite Putnam High and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam High position performs unexpectedly, Eaton Vance 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 Eaton Vance will offset losses from the drop in Eaton Vance'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 |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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