Correlation Between Putnam High and Oakmark Bond
Can any of the company-specific risk be diversified away by investing in both Putnam High and Oakmark Bond 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 Oakmark Bond 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 Oakmark Bond, you can compare the effects of market volatilities on Putnam High and Oakmark Bond 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 Oakmark Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam High and Oakmark Bond.
Diversification Opportunities for Putnam High and Oakmark Bond
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Putnam and Oakmark is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Putnam High Income and Oakmark Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oakmark Bond 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 Oakmark Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oakmark Bond has no effect on the direction of Putnam High i.e., Putnam High and Oakmark Bond go up and down completely randomly.
Pair Corralation between Putnam High and Oakmark Bond
Considering the 90-day investment horizon Putnam High Income is expected to generate 1.35 times more return on investment than Oakmark Bond. However, Putnam High is 1.35 times more volatile than Oakmark Bond. It trades about 0.25 of its potential returns per unit of risk. Oakmark Bond is currently generating about 0.13 per unit of risk. If you would invest 664.00 in Putnam High Income on September 1, 2024 and sell it today you would earn a total of 17.00 from holding Putnam High Income or generate 2.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Putnam High Income vs. Oakmark Bond
Performance |
| Timeline |
| Putnam High Income |
| Oakmark Bond |
Putnam High and Oakmark Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam High and Oakmark Bond
The main advantage of trading using opposite Putnam High and Oakmark Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam High position performs unexpectedly, Oakmark Bond 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 Oakmark Bond will offset losses from the drop in Oakmark Bond'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 |
| Oakmark Bond vs. Oakmark International Fund | Oakmark Bond vs. Oakmark Fund Advisor | Oakmark Bond vs. Oakmark Select Fund | Oakmark Bond vs. Oakmark Global Select |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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