Correlation Between Putnam High and Putnam Short
Can any of the company-specific risk be diversified away by investing in both Putnam High and Putnam Short 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 High and Putnam Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Putnam High Yield and Putnam Short Duration, you can compare the effects of market volatilities on Putnam High and Putnam Short 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 High with a short position of Putnam Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam High and Putnam Short.
Diversification Opportunities for Putnam High and Putnam Short
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Putnam and Putnam is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Putnam High Yield and Putnam Short Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Short Duration and Putnam High 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 High Yield are associated (or correlated) with Putnam Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Short Duration has no effect on the direction of Putnam High i.e., Putnam High and Putnam Short go up and down completely randomly.
Pair Corralation between Putnam High and Putnam Short
Assuming the 90 days horizon Putnam High Yield is expected to generate 1.68 times more return on investment than Putnam Short. However, Putnam High is 1.68 times more volatile than Putnam Short Duration. It trades about 0.15 of its potential returns per unit of risk. Putnam Short Duration is currently generating about 0.14 per unit of risk. If you would invest 537.00 in Putnam High Yield on August 31, 2024 and sell it today you would earn a total of 3.00 from holding Putnam High Yield or generate 0.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putnam High Yield vs. Putnam Short Duration
Performance |
| Timeline |
| Putnam High Yield |
| Putnam Short Duration |
Putnam High and Putnam Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam High and Putnam Short
The main advantage of trading using opposite Putnam High and Putnam Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam High position performs unexpectedly, Putnam Short 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 Short will offset losses from the drop in Putnam Short's long position.| Putnam High vs. Federated Institutional High | Putnam High vs. Valic Company I | Putnam High vs. Prudential Short Duration | Putnam High vs. Blackrock High Yield |
| Putnam Short vs. Virtus Global Real | Putnam Short vs. Allianzgi Mid Cap Fund | Putnam Short vs. Virtus Select Mlp | Putnam Short vs. Aquagold International |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |