Correlation Between Putman Absolute and Franklin High
Can any of the company-specific risk be diversified away by investing in both Putman Absolute and Franklin High 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 Putman Absolute and Franklin High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Putman Absolute Return and Franklin High Income, you can compare the effects of market volatilities on Putman Absolute and Franklin High 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 Putman Absolute with a short position of Franklin High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putman Absolute and Franklin High.
Diversification Opportunities for Putman Absolute and Franklin High
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Putman and Franklin is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Putman Absolute Return and Franklin High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin High Income and Putman Absolute 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 Putman Absolute Return are associated (or correlated) with Franklin High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin High Income has no effect on the direction of Putman Absolute i.e., Putman Absolute and Franklin High go up and down completely randomly.
Pair Corralation between Putman Absolute and Franklin High
Assuming the 90 days horizon Putman Absolute Return is expected to under-perform the Franklin High. But the mutual fund apears to be less risky and, when comparing its historical volatility, Putman Absolute Return is 1.76 times less risky than Franklin High. The mutual fund trades about -0.01 of its potential returns per unit of risk. The Franklin High Income is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 144.00 in Franklin High Income on September 15, 2024 and sell it today you would earn a total of 32.00 from holding Franklin High Income or generate 22.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 7.68% |
| Values | Daily Returns |
Putman Absolute Return vs. Franklin High Income
Performance |
| Timeline |
| Putman Absolute Return |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Franklin High Income |
Putman Absolute and Franklin High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putman Absolute and Franklin High
The main advantage of trading using opposite Putman Absolute and Franklin High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putman Absolute position performs unexpectedly, Franklin High 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 Franklin High will offset losses from the drop in Franklin High's long position.| Putman Absolute vs. Franklin High Income | Putman Absolute vs. Metropolitan West High | Putman Absolute vs. Ppm High Yield | Putman Absolute vs. Needham Aggressive Growth |
| Franklin High vs. Franklin Natural Resources | Franklin High vs. Alpsalerian Energy Infrastructure | Franklin High vs. World Energy Fund | Franklin High vs. Oil Gas Ultrasector |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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