Correlation Between Putnam Money and Foreign Bond
Can any of the company-specific risk be diversified away by investing in both Putnam Money and Foreign Bond 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 Foreign Bond 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 Foreign Bond Fund, you can compare the effects of market volatilities on Putnam Money and Foreign Bond 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 Foreign Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Money and Foreign Bond.
Diversification Opportunities for Putnam Money and Foreign Bond
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Putnam and Foreign is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Money Market and Foreign Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Foreign Bond 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 Foreign Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Foreign Bond has no effect on the direction of Putnam Money i.e., Putnam Money and Foreign Bond go up and down completely randomly.
Pair Corralation between Putnam Money and Foreign Bond
Assuming the 90 days horizon Putnam Money Market is expected to generate 1.54 times more return on investment than Foreign Bond. However, Putnam Money is 1.54 times more volatile than Foreign Bond Fund. It trades about 0.03 of its potential returns per unit of risk. Foreign Bond Fund is currently generating about 0.0 per unit of risk. If you would invest 92.00 in Putnam Money Market on October 25, 2024 and sell it today you would earn a total of 8.00 from holding Putnam Money Market or generate 8.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.2% |
| Values | Daily Returns |
Putnam Money Market vs. Foreign Bond Fund
Performance |
| Timeline |
| Putnam Money Market |
| Foreign Bond |
Putnam Money and Foreign Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Money and Foreign Bond
The main advantage of trading using opposite Putnam Money and Foreign Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Money position performs unexpectedly, Foreign Bond 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 Foreign Bond will offset losses from the drop in Foreign Bond's long position.| Putnam Money vs. Small Midcap Dividend Income | Putnam Money vs. Victory Tax Exempt Fund | Putnam Money vs. Nasdaq 100 Index Fund | Putnam Money vs. Rational Dividend Capture |
| Foreign Bond vs. Great West Moderately Aggressive | Foreign Bond vs. College Retirement Equities | Foreign Bond vs. Retirement Living Through | Foreign Bond vs. Putnman Retirement Ready |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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