Correlation Between Putnam Equity and Putnam Short
Can any of the company-specific risk be diversified away by investing in both Putnam Equity and Putnam Short 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 Short 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 Short Duration, you can compare the effects of market volatilities on Putnam Equity and Putnam Short 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 Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Equity and Putnam Short.
Diversification Opportunities for Putnam Equity and Putnam Short
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Putnam and Putnam is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Equity Income and Putnam Short Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Short Duration 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 Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Short Duration has no effect on the direction of Putnam Equity i.e., Putnam Equity and Putnam Short go up and down completely randomly.
Pair Corralation between Putnam Equity and Putnam Short
Assuming the 90 days horizon Putnam Equity Income is expected to generate 8.01 times more return on investment than Putnam Short. However, Putnam Equity is 8.01 times more volatile than Putnam Short Duration. It trades about 0.14 of its potential returns per unit of risk. Putnam Short Duration is currently generating about 0.14 per unit of risk. If you would invest 3,650 in Putnam Equity Income on September 4, 2024 and sell it today you would earn a total of 210.00 from holding Putnam Equity Income or generate 5.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putnam Equity Income vs. Putnam Short Duration
Performance |
| Timeline |
| Putnam Equity Income |
| Putnam Short Duration |
Putnam Equity and Putnam Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Equity and Putnam Short
The main advantage of trading using opposite Putnam Equity and Putnam Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Equity position performs unexpectedly, Putnam Short 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 Short will offset losses from the drop in Putnam Short'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 Short vs. Putnam Equity Income | Putnam Short vs. Putnam Tax Exempt | Putnam Short vs. Putnam Floating Rate | Putnam Short 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |