Correlation Between Putnam Tax and Putnam Dynamic
Can any of the company-specific risk be diversified away by investing in both Putnam Tax and Putnam Dynamic 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 Tax and Putnam Dynamic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Putnam Tax Exempt and Putnam Dynamic Asset, you can compare the effects of market volatilities on Putnam Tax and Putnam Dynamic 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 Tax with a short position of Putnam Dynamic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Tax and Putnam Dynamic.
Diversification Opportunities for Putnam Tax and Putnam Dynamic
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Putnam and Putnam is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Tax Exempt and Putnam Dynamic Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Dynamic Asset and Putnam Tax 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 Tax Exempt are associated (or correlated) with Putnam Dynamic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Dynamic Asset has no effect on the direction of Putnam Tax i.e., Putnam Tax and Putnam Dynamic go up and down completely randomly.
Pair Corralation between Putnam Tax and Putnam Dynamic
Assuming the 90 days horizon Putnam Tax is expected to generate 3.79 times less return on investment than Putnam Dynamic. But when comparing it to its historical volatility, Putnam Tax Exempt is 1.54 times less risky than Putnam Dynamic. It trades about 0.07 of its potential returns per unit of risk. Putnam Dynamic Asset is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 1,704 in Putnam Dynamic Asset on September 4, 2024 and sell it today you would earn a total of 84.00 from holding Putnam Dynamic Asset or generate 4.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putnam Tax Exempt vs. Putnam Dynamic Asset
Performance |
| Timeline |
| Putnam Tax Exempt |
| Putnam Dynamic Asset |
Putnam Tax and Putnam Dynamic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Tax and Putnam Dynamic
The main advantage of trading using opposite Putnam Tax and Putnam Dynamic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Tax position performs unexpectedly, Putnam Dynamic 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 Putnam Dynamic will offset losses from the drop in Putnam Dynamic's long position.| Putnam Tax vs. Maryland Tax Free Bond | Putnam Tax vs. Bbh Intermediate Municipal | Putnam Tax vs. Multisector Bond Sma | Putnam Tax vs. Lind Capital Partners |
| Putnam Dynamic vs. Putnam Equity Income | Putnam Dynamic vs. Putnam Tax Exempt | Putnam Dynamic vs. Putnam Floating Rate | Putnam Dynamic vs. Putnam 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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