Correlation Between Putnam Money and Multi Manager
Can any of the company-specific risk be diversified away by investing in both Putnam Money and Multi Manager 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 Money and Multi Manager into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Putnam Money Market and Multi Manager Directional Alternative, you can compare the effects of market volatilities on Putnam Money and Multi Manager 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 Money with a short position of Multi Manager. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Money and Multi Manager.
Diversification Opportunities for Putnam Money and Multi Manager
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Putnam and Multi is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Money Market and Multi Manager Directional Alte in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multi Manager Direct and Putnam Money 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 Money Market are associated (or correlated) with Multi Manager. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multi Manager Direct has no effect on the direction of Putnam Money i.e., Putnam Money and Multi Manager go up and down completely randomly.
Pair Corralation between Putnam Money and Multi Manager
Assuming the 90 days horizon Putnam Money is expected to generate 4.32 times less return on investment than Multi Manager. But when comparing it to its historical volatility, Putnam Money Market is 3.58 times less risky than Multi Manager. It trades about 0.14 of its potential returns per unit of risk. Multi Manager Directional Alternative is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 662.00 in Multi Manager Directional Alternative on September 15, 2024 and sell it today you would earn a total of 162.00 from holding Multi Manager Directional Alternative or generate 24.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.63% |
| Values | Daily Returns |
Putnam Money Market vs. Multi Manager Directional Alte
Performance |
| Timeline |
| Putnam Money Market |
| Multi Manager Direct |
Putnam Money and Multi Manager Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Money and Multi Manager
The main advantage of trading using opposite Putnam Money and Multi Manager positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Money position performs unexpectedly, Multi Manager 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 Multi Manager will offset losses from the drop in Multi Manager's long position.| Putnam Money vs. Vanguard Total Stock | Putnam Money vs. Vanguard 500 Index | Putnam Money vs. Vanguard Total Stock | Putnam Money vs. Vanguard Total Stock |
| Multi Manager vs. Putnam Money Market | Multi Manager vs. Ab Government Exchange | Multi Manager vs. Blackrock Exchange Portfolio | Multi Manager vs. Ubs Money Series |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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