Correlation Between Putnam High and Trillium Small/mid
Can any of the company-specific risk be diversified away by investing in both Putnam High and Trillium Small/mid 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 Trillium Small/mid 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 Trillium Smallmid Cap, you can compare the effects of market volatilities on Putnam High and Trillium Small/mid 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 Trillium Small/mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam High and Trillium Small/mid.
Diversification Opportunities for Putnam High and Trillium Small/mid
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Putnam and Trillium is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Putnam High Income and Trillium Smallmid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trillium Smallmid 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 Trillium Small/mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trillium Smallmid Cap has no effect on the direction of Putnam High i.e., Putnam High and Trillium Small/mid go up and down completely randomly.
Pair Corralation between Putnam High and Trillium Small/mid
Considering the 90-day investment horizon Putnam High Income is expected to generate 0.77 times more return on investment than Trillium Small/mid. However, Putnam High Income is 1.3 times less risky than Trillium Small/mid. It trades about 0.1 of its potential returns per unit of risk. Trillium Smallmid Cap is currently generating about 0.07 per unit of risk. If you would invest 608.00 in Putnam High Income on September 3, 2024 and sell it today you would earn a total of 73.00 from holding Putnam High Income or generate 12.01% 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. Trillium Smallmid Cap
Performance |
| Timeline |
| Putnam High Income |
| Trillium Smallmid Cap |
Putnam High and Trillium Small/mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam High and Trillium Small/mid
The main advantage of trading using opposite Putnam High and Trillium Small/mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam High position performs unexpectedly, Trillium Small/mid 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 Trillium Small/mid will offset losses from the drop in Trillium Small/mid'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 |
| Trillium Small/mid vs. Victory Rs Partners | Trillium Small/mid vs. Fpa Queens Road | Trillium Small/mid vs. Vanguard Small Cap Value | Trillium Small/mid vs. Boston Partners Small |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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