Correlation Between Putnam High and Rand Capital
Can any of the company-specific risk be diversified away by investing in both Putnam High and Rand 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 Rand 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 Rand Capital Corp, you can compare the effects of market volatilities on Putnam High and Rand 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 Rand Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam High and Rand Capital.
Diversification Opportunities for Putnam High and Rand Capital
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Putnam and Rand is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Putnam High Income and Rand Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rand Capital Corp 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 Rand Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rand Capital Corp has no effect on the direction of Putnam High i.e., Putnam High and Rand Capital go up and down completely randomly.
Pair Corralation between Putnam High and Rand Capital
Considering the 90-day investment horizon Putnam High is expected to generate 2.06 times less return on investment than Rand Capital. But when comparing it to its historical volatility, Putnam High Income is 2.38 times less risky than Rand Capital. It trades about 0.07 of its potential returns per unit of risk. Rand Capital Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,176 in Rand Capital Corp on August 28, 2024 and sell it today you would earn a total of 473.00 from holding Rand Capital Corp or generate 40.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 92.37% |
| Values | Daily Returns |
Putnam High Income vs. Rand Capital Corp
Performance |
| Timeline |
| Putnam High Income |
| Rand Capital Corp |
Putnam High and Rand Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam High and Rand Capital
The main advantage of trading using opposite Putnam High and Rand Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam High position performs unexpectedly, Rand 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 Rand Capital will offset losses from the drop in Rand 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 |
| Rand Capital vs. PowerUp Acquisition Corp | Rand Capital vs. Aurora Innovation | Rand Capital vs. HUMANA INC | Rand Capital 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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