Correlation Between Putnam Managed and Pioneer Municipal
Can any of the company-specific risk be diversified away by investing in both Putnam Managed and Pioneer Municipal 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 Managed and Pioneer Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Putnam Managed Municipal and Pioneer Municipal High, you can compare the effects of market volatilities on Putnam Managed and Pioneer Municipal 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 Managed with a short position of Pioneer Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Managed and Pioneer Municipal.
Diversification Opportunities for Putnam Managed and Pioneer Municipal
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Putnam and Pioneer is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Managed Municipal and Pioneer Municipal High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pioneer Municipal High and Putnam Managed 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 Managed Municipal are associated (or correlated) with Pioneer Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pioneer Municipal High has no effect on the direction of Putnam Managed i.e., Putnam Managed and Pioneer Municipal go up and down completely randomly.
Pair Corralation between Putnam Managed and Pioneer Municipal
Considering the 90-day investment horizon Putnam Managed Municipal is expected to under-perform the Pioneer Municipal. But the stock apears to be less risky and, when comparing its historical volatility, Putnam Managed Municipal is 1.33 times less risky than Pioneer Municipal. The stock trades about -0.14 of its potential returns per unit of risk. The Pioneer Municipal High is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 851.00 in Pioneer Municipal High on August 24, 2024 and sell it today you would earn a total of 16.00 from holding Pioneer Municipal High or generate 1.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putnam Managed Municipal vs. Pioneer Municipal High
Performance |
| Timeline |
| Putnam Managed Municipal |
| Pioneer Municipal High |
Putnam Managed and Pioneer Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Managed and Pioneer Municipal
The main advantage of trading using opposite Putnam Managed and Pioneer Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Managed position performs unexpectedly, Pioneer Municipal 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 Pioneer Municipal will offset losses from the drop in Pioneer Municipal's long position.| Putnam Managed vs. MFS Investment Grade | Putnam Managed vs. Eaton Vance National | Putnam Managed vs. Blackrock Munivest | Putnam Managed vs. DTF Tax Free |
| Pioneer Municipal vs. New America High | Pioneer Municipal vs. DWS Municipal Income | Pioneer Municipal vs. RiverNorth Specialty Finance | Pioneer Municipal vs. Putnam Managed Municipal |
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 Stocks Directory module to find actively traded stocks across global markets.
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