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
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Putnam and Putnam is 0.67. 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
If you would invest 541.00 in Putnam High Yield on September 12, 2024 and sell it today you would earn a total of 2.00 from holding Putnam High Yield or generate 0.37% 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. Intal High Relative | Putnam High vs. Ab Global Risk | Putnam High vs. Needham Aggressive Growth | Putnam High vs. Ppm High Yield |
| Putnam Short vs. Gabelli Gold Fund | Putnam Short vs. Gold And Precious | Putnam Short vs. Europac Gold Fund | Putnam Short vs. Franklin Gold Precious |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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