Correlation Between Putnam Equity and Putnam Retirement
Can any of the company-specific risk be diversified away by investing in both Putnam Equity and Putnam Retirement 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 Putnam Retirement 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 Putnam Retirement Advantage, you can compare the effects of market volatilities on Putnam Equity and Putnam Retirement 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 Putnam Retirement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Equity and Putnam Retirement.
Diversification Opportunities for Putnam Equity and Putnam Retirement
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Putnam and Putnam is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Equity Income and Putnam Retirement Advantage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Retirement 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 Putnam Retirement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Retirement has no effect on the direction of Putnam Equity i.e., Putnam Equity and Putnam Retirement go up and down completely randomly.
Pair Corralation between Putnam Equity and Putnam Retirement
Assuming the 90 days horizon Putnam Equity Income is expected to generate 0.81 times more return on investment than Putnam Retirement. However, Putnam Equity Income is 1.24 times less risky than Putnam Retirement. It trades about 0.21 of its potential returns per unit of risk. Putnam Retirement Advantage is currently generating about 0.01 per unit of risk. If you would invest 3,489 in Putnam Equity Income on October 25, 2024 and sell it today you would earn a total of 95.00 from holding Putnam Equity Income or generate 2.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putnam Equity Income vs. Putnam Retirement Advantage
Performance |
| Timeline |
| Putnam Equity Income |
| Putnam Retirement |
Putnam Equity and Putnam Retirement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Equity and Putnam Retirement
The main advantage of trading using opposite Putnam Equity and Putnam Retirement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Equity position performs unexpectedly, Putnam Retirement 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 Retirement will offset losses from the drop in Putnam Retirement's long position.| Putnam Equity vs. Putnam Growth Opportunities | Putnam Equity vs. Putnam International Equity | Putnam Equity vs. George Putnam Fund | Putnam Equity vs. Putnam Multi Cap Growth |
| Putnam Retirement vs. Fidelity Freedom Index | Putnam Retirement vs. Fidelity Freedom 2060 | Putnam Retirement vs. HUMANA INC | Putnam Retirement vs. Aquagold International |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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