Correlation Between Putman Absolute and Federated Institutional
Can any of the company-specific risk be diversified away by investing in both Putman Absolute and Federated Institutional 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 Federated Institutional 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 Federated Institutional High, you can compare the effects of market volatilities on Putman Absolute and Federated Institutional 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 Federated Institutional. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putman Absolute and Federated Institutional.
Diversification Opportunities for Putman Absolute and Federated Institutional
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Putman and FEDERATED is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Putman Absolute Return and Federated Institutional High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Institutional 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 Federated Institutional. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Institutional has no effect on the direction of Putman Absolute i.e., Putman Absolute and Federated Institutional go up and down completely randomly.
Pair Corralation between Putman Absolute and Federated Institutional
If you would invest 892.00 in Federated Institutional High on September 2, 2024 and sell it today you would earn a total of 3.00 from holding Federated Institutional High or generate 0.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Putman Absolute Return vs. Federated Institutional High
Performance |
| Timeline |
| Putman Absolute Return |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Federated Institutional |
Putman Absolute and Federated Institutional Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putman Absolute and Federated Institutional
The main advantage of trading using opposite Putman Absolute and Federated Institutional positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putman Absolute position performs unexpectedly, Federated Institutional 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 Federated Institutional will offset losses from the drop in Federated Institutional's long position.| Putman Absolute vs. Federated Institutional High | Putman Absolute vs. Morningstar Aggressive Growth | Putman Absolute vs. Strategic Allocation Aggressive | Putman Absolute vs. Siit High Yield |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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