Correlation Between Putnam Tax and Putman Absolute
Can any of the company-specific risk be diversified away by investing in both Putnam Tax and Putman Absolute 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 Putman Absolute 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 Putman Absolute Return, you can compare the effects of market volatilities on Putnam Tax and Putman Absolute 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 Putman Absolute. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Tax and Putman Absolute.
Diversification Opportunities for Putnam Tax and Putman Absolute
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Putnam and Putman is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Tax Exempt and Putman Absolute Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putman Absolute Return 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 Putman Absolute. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putman Absolute Return has no effect on the direction of Putnam Tax i.e., Putnam Tax and Putman Absolute go up and down completely randomly.
Pair Corralation between Putnam Tax and Putman Absolute
Assuming the 90 days horizon Putnam Tax Exempt is expected to generate about the same return on investment as Putman Absolute Return. But, Putnam Tax Exempt is 1.35 times less risky than Putman Absolute. It trades about 0.08 of its potential returns per unit of risk. Putman Absolute Return is currently generating about 0.06 per unit of risk. If you would invest 800.00 in Putman Absolute Return on September 1, 2024 and sell it today you would earn a total of 29.00 from holding Putman Absolute Return or generate 3.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.47% |
| Values | Daily Returns |
Putnam Tax Exempt vs. Putman Absolute Return
Performance |
| Timeline |
| Putnam Tax Exempt |
| Putman Absolute Return |
Putnam Tax and Putman Absolute Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Tax and Putman Absolute
The main advantage of trading using opposite Putnam Tax and Putman Absolute positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Tax position performs unexpectedly, Putman Absolute 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 Putman Absolute will offset losses from the drop in Putman Absolute's long position.| Putnam Tax vs. Putnam Equity Income | Putnam Tax vs. Putnam Floating Rate | Putnam Tax vs. Putnam High Yield | Putnam Tax vs. Putnam Floating Rate |
| Putman Absolute vs. Blackrock Inflation Protected | Putman Absolute vs. Ab Bond Inflation | Putman Absolute vs. The Hartford Inflation | Putman Absolute vs. Guidepath Managed Futures |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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