Correlation Between Putnam Equity and Pacific Funds
Can any of the company-specific risk be diversified away by investing in both Putnam Equity and Pacific Funds 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 Equity and Pacific Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Putnam Equity Income and Pacific Funds Strategic, you can compare the effects of market volatilities on Putnam Equity and Pacific Funds 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 Equity with a short position of Pacific Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Equity and Pacific Funds.
Diversification Opportunities for Putnam Equity and Pacific Funds
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Putnam and Pacific is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Equity Income and Pacific Funds Strategic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacific Funds Strategic and Putnam Equity 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 Equity Income are associated (or correlated) with Pacific Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacific Funds Strategic has no effect on the direction of Putnam Equity i.e., Putnam Equity and Pacific Funds go up and down completely randomly.
Pair Corralation between Putnam Equity and Pacific Funds
Assuming the 90 days horizon Putnam Equity Income is expected to generate 2.87 times more return on investment than Pacific Funds. However, Putnam Equity is 2.87 times more volatile than Pacific Funds Strategic. It trades about 0.11 of its potential returns per unit of risk. Pacific Funds Strategic is currently generating about 0.12 per unit of risk. If you would invest 2,655 in Putnam Equity Income on August 30, 2024 and sell it today you would earn a total of 1,227 from holding Putnam Equity Income or generate 46.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putnam Equity Income vs. Pacific Funds Strategic
Performance |
| Timeline |
| Putnam Equity Income |
| Pacific Funds Strategic |
Putnam Equity and Pacific Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Equity and Pacific Funds
The main advantage of trading using opposite Putnam Equity and Pacific Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Equity position performs unexpectedly, Pacific Funds 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 Pacific Funds will offset losses from the drop in Pacific Funds' long position.| Putnam Equity vs. Franklin Adjustable Government | Putnam Equity vs. Inverse Government Long | Putnam Equity vs. Lord Abbett Government | Putnam Equity vs. John Hancock Government |
| Pacific Funds vs. Jp Morgan Smartretirement | Pacific Funds vs. Shelton Funds | Pacific Funds vs. Nova Fund Class | Pacific Funds vs. Artisan Thematic Fund |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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