Correlation Between Putnam High and Sit Large
Can any of the company-specific risk be diversified away by investing in both Putnam High and Sit Large 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 Sit Large 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 Sit Large Cap, you can compare the effects of market volatilities on Putnam High and Sit Large 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 Sit Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam High and Sit Large.
Diversification Opportunities for Putnam High and Sit Large
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Putnam and Sit is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Putnam High Income and Sit Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sit Large Cap 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 Sit Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sit Large Cap has no effect on the direction of Putnam High i.e., Putnam High and Sit Large go up and down completely randomly.
Pair Corralation between Putnam High and Sit Large
Considering the 90-day investment horizon Putnam High is expected to generate 2.38 times less return on investment than Sit Large. But when comparing it to its historical volatility, Putnam High Income is 1.15 times less risky than Sit Large. It trades about 0.04 of its potential returns per unit of risk. Sit Large Cap is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 5,010 in Sit Large Cap on August 26, 2024 and sell it today you would earn a total of 2,845 from holding Sit Large Cap or generate 56.79% 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. Sit Large Cap
Performance |
| Timeline |
| Putnam High Income |
| Sit Large Cap |
Putnam High and Sit Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam High and Sit Large
The main advantage of trading using opposite Putnam High and Sit Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam High position performs unexpectedly, Sit Large 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 Sit Large will offset losses from the drop in Sit Large's long position.| Putnam High vs. Calamos Convertible Opportunities | Putnam High vs. Calamos Global Dynamic | Putnam High vs. Calamos Strategic Total | Putnam High vs. Calamos LongShort Equity |
| Sit Large vs. Sit Small Cap | Sit Large vs. Sit Global Dividend | Sit Large vs. Sit Small Cap | Sit Large vs. Sit Small Cap |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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