Correlation Between Putnam Money and Sextant Short-term
Can any of the company-specific risk be diversified away by investing in both Putnam Money and Sextant Short-term 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 Sextant Short-term 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 Sextant Short Term Bond, you can compare the effects of market volatilities on Putnam Money and Sextant Short-term 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 Sextant Short-term. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Money and Sextant Short-term.
Diversification Opportunities for Putnam Money and Sextant Short-term
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Putnam and Sextant is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Money Market and Sextant Short Term Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sextant Short Term 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 Sextant Short-term. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sextant Short Term has no effect on the direction of Putnam Money i.e., Putnam Money and Sextant Short-term go up and down completely randomly.
Pair Corralation between Putnam Money and Sextant Short-term
Assuming the 90 days horizon Putnam Money Market is expected to generate 4.79 times more return on investment than Sextant Short-term. However, Putnam Money is 4.79 times more volatile than Sextant Short Term Bond. It trades about 0.03 of its potential returns per unit of risk. Sextant Short Term Bond is currently generating about 0.1 per unit of risk. If you would invest 92.00 in Putnam Money Market on October 9, 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 | 99.4% |
| Values | Daily Returns |
Putnam Money Market vs. Sextant Short Term Bond
Performance |
| Timeline |
| Putnam Money Market |
| Sextant Short Term |
Putnam Money and Sextant Short-term Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Money and Sextant Short-term
The main advantage of trading using opposite Putnam Money and Sextant Short-term positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Money position performs unexpectedly, Sextant Short-term 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 Sextant Short-term will offset losses from the drop in Sextant Short-term's long position.| Putnam Money vs. Blackrock Financial Institutions | Putnam Money vs. Davis Financial Fund | Putnam Money vs. John Hancock Financial | Putnam Money vs. Prudential Financial Services |
| Sextant Short-term vs. Sextant Growth Fund | Sextant Short-term vs. Sextant International Fund | Sextant Short-term vs. Sextant Bond Income | Sextant Short-term vs. Sextant E Fund |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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