Correlation Between Putnam High and Frontier Mfg
Can any of the company-specific risk be diversified away by investing in both Putnam High and Frontier Mfg 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 Frontier Mfg 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 Frontier Mfg Global, you can compare the effects of market volatilities on Putnam High and Frontier Mfg 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 Frontier Mfg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam High and Frontier Mfg.
Diversification Opportunities for Putnam High and Frontier Mfg
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Putnam and Frontier is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Putnam High Income and Frontier Mfg Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Frontier Mfg Global 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 Frontier Mfg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Frontier Mfg Global has no effect on the direction of Putnam High i.e., Putnam High and Frontier Mfg go up and down completely randomly.
Pair Corralation between Putnam High and Frontier Mfg
Considering the 90-day investment horizon Putnam High is expected to generate 1.7 times less return on investment than Frontier Mfg. In addition to that, Putnam High is 1.29 times more volatile than Frontier Mfg Global. It trades about 0.06 of its total potential returns per unit of risk. Frontier Mfg Global is currently generating about 0.12 per unit of volatility. If you would invest 1,037 in Frontier Mfg Global on September 3, 2024 and sell it today you would earn a total of 522.00 from holding Frontier Mfg Global or generate 50.34% 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. Frontier Mfg Global
Performance |
| Timeline |
| Putnam High Income |
| Frontier Mfg Global |
Putnam High and Frontier Mfg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam High and Frontier Mfg
The main advantage of trading using opposite Putnam High and Frontier Mfg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam High position performs unexpectedly, Frontier Mfg 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 Frontier Mfg will offset losses from the drop in Frontier Mfg'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 |
| Frontier Mfg vs. Astor Longshort Fund | Frontier Mfg vs. Barings Active Short | Frontier Mfg vs. Rbc Short Duration | Frontier Mfg vs. Calvert Short Duration |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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