Correlation Between Putnam Equity and Aqr Managed
Can any of the company-specific risk be diversified away by investing in both Putnam Equity and Aqr Managed 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 Aqr Managed 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 Aqr Managed Futures, you can compare the effects of market volatilities on Putnam Equity and Aqr Managed 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 Aqr Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Equity and Aqr Managed.
Diversification Opportunities for Putnam Equity and Aqr Managed
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Putnam and Aqr is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Equity Income and Aqr Managed Futures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Managed Futures 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 Aqr Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Managed Futures has no effect on the direction of Putnam Equity i.e., Putnam Equity and Aqr Managed go up and down completely randomly.
Pair Corralation between Putnam Equity and Aqr Managed
Assuming the 90 days horizon Putnam Equity Income is expected to generate 0.89 times more return on investment than Aqr Managed. However, Putnam Equity Income is 1.12 times less risky than Aqr Managed. It trades about 0.14 of its potential returns per unit of risk. Aqr Managed Futures is currently generating about 0.0 per unit of risk. If you would invest 3,703 in Putnam Equity Income on August 25, 2024 and sell it today you would earn a total of 152.00 from holding Putnam Equity Income or generate 4.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putnam Equity Income vs. Aqr Managed Futures
Performance |
| Timeline |
| Putnam Equity Income |
| Aqr Managed Futures |
Putnam Equity and Aqr Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Equity and Aqr Managed
The main advantage of trading using opposite Putnam Equity and Aqr Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Equity position performs unexpectedly, Aqr Managed 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 Aqr Managed will offset losses from the drop in Aqr Managed's long position.| Putnam Equity vs. Aqr Managed Futures | Putnam Equity vs. Ab Bond Inflation | Putnam Equity vs. Vy Blackrock Inflation | Putnam Equity vs. Schwab Treasury Inflation |
| Aqr Managed vs. Aqr Large Cap | Aqr Managed vs. Aqr Large Cap | Aqr Managed vs. Aqr International Defensive | Aqr Managed vs. Aqr International Defensive |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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