Correlation Between Putnam Floating and Pace Smallmedium
Can any of the company-specific risk be diversified away by investing in both Putnam Floating and Pace Smallmedium 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 Floating and Pace Smallmedium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Putnam Floating Rate and Pace Smallmedium Growth, you can compare the effects of market volatilities on Putnam Floating and Pace Smallmedium 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 Floating with a short position of Pace Smallmedium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Floating and Pace Smallmedium.
Diversification Opportunities for Putnam Floating and Pace Smallmedium
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Putnam and Pace is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Floating Rate and Pace Smallmedium Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pace Smallmedium Growth and Putnam Floating 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 Floating Rate are associated (or correlated) with Pace Smallmedium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pace Smallmedium Growth has no effect on the direction of Putnam Floating i.e., Putnam Floating and Pace Smallmedium go up and down completely randomly.
Pair Corralation between Putnam Floating and Pace Smallmedium
Assuming the 90 days horizon Putnam Floating is expected to generate 13.58 times less return on investment than Pace Smallmedium. But when comparing it to its historical volatility, Putnam Floating Rate is 9.54 times less risky than Pace Smallmedium. It trades about 0.22 of its potential returns per unit of risk. Pace Smallmedium Growth is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 1,273 in Pace Smallmedium Growth on August 28, 2024 and sell it today you would earn a total of 134.00 from holding Pace Smallmedium Growth or generate 10.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putnam Floating Rate vs. Pace Smallmedium Growth
Performance |
| Timeline |
| Putnam Floating Rate |
| Pace Smallmedium Growth |
Putnam Floating and Pace Smallmedium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Floating and Pace Smallmedium
The main advantage of trading using opposite Putnam Floating and Pace Smallmedium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Floating position performs unexpectedly, Pace Smallmedium 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 Pace Smallmedium will offset losses from the drop in Pace Smallmedium's long position.| Putnam Floating vs. Putnam Equity Income | Putnam Floating vs. Putnam Tax Exempt | Putnam Floating vs. Putnam High Yield | Putnam Floating vs. Putnam Massachusetts Tax |
| Pace Smallmedium vs. Western Asset Diversified | Pace Smallmedium vs. Fidelity Advisor Diversified | Pace Smallmedium vs. Pimco Diversified Income | Pace Smallmedium vs. Calvert Conservative Allocation |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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