Correlation Between Putnam Money and Extended Market
Can any of the company-specific risk be diversified away by investing in both Putnam Money and Extended Market 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 Extended Market 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 Extended Market Index, you can compare the effects of market volatilities on Putnam Money and Extended Market 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 Extended Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Money and Extended Market.
Diversification Opportunities for Putnam Money and Extended Market
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Putnam and Extended is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Money Market and Extended Market Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Extended Market Index 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 Extended Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Extended Market Index has no effect on the direction of Putnam Money i.e., Putnam Money and Extended Market go up and down completely randomly.
Pair Corralation between Putnam Money and Extended Market
Assuming the 90 days horizon Putnam Money Market is expected to generate 0.08 times more return on investment than Extended Market. However, Putnam Money Market is 12.62 times less risky than Extended Market. It trades about 0.12 of its potential returns per unit of risk. Extended Market Index is currently generating about 0.01 per unit of risk. If you would invest 98.00 in Putnam Money Market on October 17, 2024 and sell it today you would earn a total of 2.00 from holding Putnam Money Market or generate 2.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.31% |
| Values | Daily Returns |
Putnam Money Market vs. Extended Market Index
Performance |
| Timeline |
| Putnam Money Market |
| Extended Market Index |
Putnam Money and Extended Market Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Money and Extended Market
The main advantage of trading using opposite Putnam Money and Extended Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Money position performs unexpectedly, Extended Market 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 Extended Market will offset losses from the drop in Extended Market's long position.| Putnam Money vs. Dws Equity Sector | Putnam Money vs. Enhanced Fixed Income | Putnam Money vs. T Rowe Price | Putnam Money vs. Small Cap Equity |
| Extended Market vs. Clearbridge Energy Mlp | Extended Market vs. Pimco Energy Tactical | Extended Market vs. World Energy Fund | Extended Market vs. Invesco Energy 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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