Correlation Between Long Term and Putnam Sustainable
Can any of the company-specific risk be diversified away by investing in both Long Term and Putnam Sustainable 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 Long Term and Putnam Sustainable into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Long Term Government Fund and Putnam Sustainable Future, you can compare the effects of market volatilities on Long Term and Putnam Sustainable 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 Long Term with a short position of Putnam Sustainable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Long Term and Putnam Sustainable.
Diversification Opportunities for Long Term and Putnam Sustainable
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Long and Putnam is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Long Term Government Fund and Putnam Sustainable Future in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Sustainable Future and Long Term 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 Long Term Government Fund are associated (or correlated) with Putnam Sustainable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Sustainable Future has no effect on the direction of Long Term i.e., Long Term and Putnam Sustainable go up and down completely randomly.
Pair Corralation between Long Term and Putnam Sustainable
Assuming the 90 days horizon Long Term Government Fund is expected to generate 0.28 times more return on investment than Putnam Sustainable. However, Long Term Government Fund is 3.59 times less risky than Putnam Sustainable. It trades about 0.12 of its potential returns per unit of risk. Putnam Sustainable Future is currently generating about -0.16 per unit of risk. If you would invest 1,405 in Long Term Government Fund on September 13, 2024 and sell it today you would earn a total of 26.00 from holding Long Term Government Fund or generate 1.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Long Term Government Fund vs. Putnam Sustainable Future
Performance |
| Timeline |
| Long Term Government |
| Putnam Sustainable Future |
Long Term and Putnam Sustainable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Long Term and Putnam Sustainable
The main advantage of trading using opposite Long Term and Putnam Sustainable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Long Term position performs unexpectedly, Putnam Sustainable 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 Putnam Sustainable will offset losses from the drop in Putnam Sustainable's long position.| Long Term vs. Pimco Rae Worldwide | Long Term vs. Pimco Foreign Bond | Long Term vs. Pimco Preferred And | Long Term vs. Pimco Fundamental Advantage |
| Putnam Sustainable vs. Dws Government Money | Putnam Sustainable vs. Intermediate Government Bond | Putnam Sustainable vs. Long Term Government Fund | Putnam Sustainable vs. Franklin Adjustable Government |
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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