Correlation Between Putnam Equity and Transamerica Intermediate
Can any of the company-specific risk be diversified away by investing in both Putnam Equity and Transamerica Intermediate 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 Transamerica Intermediate 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 Transamerica Intermediate Muni, you can compare the effects of market volatilities on Putnam Equity and Transamerica Intermediate 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 Transamerica Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Equity and Transamerica Intermediate.
Diversification Opportunities for Putnam Equity and Transamerica Intermediate
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Putnam and Transamerica is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Equity Income and Transamerica Intermediate Muni in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transamerica Intermediate 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 Transamerica Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transamerica Intermediate has no effect on the direction of Putnam Equity i.e., Putnam Equity and Transamerica Intermediate go up and down completely randomly.
Pair Corralation between Putnam Equity and Transamerica Intermediate
Assuming the 90 days horizon Putnam Equity Income is expected to generate 2.21 times more return on investment than Transamerica Intermediate. However, Putnam Equity is 2.21 times more volatile than Transamerica Intermediate Muni. It trades about 0.36 of its potential returns per unit of risk. Transamerica Intermediate Muni is currently generating about 0.22 per unit of risk. If you would invest 3,698 in Putnam Equity Income on September 1, 2024 and sell it today you would earn a total of 200.00 from holding Putnam Equity Income or generate 5.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Putnam Equity Income vs. Transamerica Intermediate Muni
Performance |
| Timeline |
| Putnam Equity Income |
| Transamerica Intermediate |
Putnam Equity and Transamerica Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Equity and Transamerica Intermediate
The main advantage of trading using opposite Putnam Equity and Transamerica Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Equity position performs unexpectedly, Transamerica Intermediate 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 Transamerica Intermediate will offset losses from the drop in Transamerica Intermediate's long position.| Putnam Equity vs. Hennessy Bp Energy | Putnam Equity vs. Fidelity Advisor Energy | Putnam Equity vs. Calvert Global Energy | Putnam Equity vs. Clearbridge Energy Mlp |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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