Correlation Between Putnam Money and Prudential Muni
Can any of the company-specific risk be diversified away by investing in both Putnam Money and Prudential Muni 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 Prudential Muni 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 Prudential Muni High, you can compare the effects of market volatilities on Putnam Money and Prudential Muni 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 Prudential Muni. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Money and Prudential Muni.
Diversification Opportunities for Putnam Money and Prudential Muni
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Putnam and Prudential is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Money Market and Prudential Muni High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Muni High 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 Prudential Muni. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Muni High has no effect on the direction of Putnam Money i.e., Putnam Money and Prudential Muni go up and down completely randomly.
Pair Corralation between Putnam Money and Prudential Muni
If you would invest 958.00 in Prudential Muni High on September 12, 2024 and sell it today you would earn a total of 5.00 from holding Prudential Muni High or generate 0.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putnam Money Market vs. Prudential Muni High
Performance |
| Timeline |
| Putnam Money Market |
| Prudential Muni High |
Putnam Money and Prudential Muni Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Money and Prudential Muni
The main advantage of trading using opposite Putnam Money and Prudential Muni positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Money position performs unexpectedly, Prudential Muni 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 Prudential Muni will offset losses from the drop in Prudential Muni'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 |
| Prudential Muni vs. Elfun Government Money | Prudential Muni vs. Chestnut Street Exchange | Prudential Muni vs. Schwab Treasury Money | Prudential Muni vs. Putnam Money Market |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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