Correlation Between Putnam Research and Putnam Short
Can any of the company-specific risk be diversified away by investing in both Putnam Research 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 Research 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 Research Fund and Putnam Short Duration, you can compare the effects of market volatilities on Putnam Research 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 Research with a short position of Putnam Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Research and Putnam Short.
Diversification Opportunities for Putnam Research and Putnam Short
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Putnam and Putnam is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Research Fund 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 Research 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 Research Fund 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 Research i.e., Putnam Research and Putnam Short go up and down completely randomly.
Pair Corralation between Putnam Research and Putnam Short
Assuming the 90 days horizon Putnam Research Fund is expected to generate 8.97 times more return on investment than Putnam Short. However, Putnam Research is 8.97 times more volatile than Putnam Short Duration. It trades about 0.13 of its potential returns per unit of risk. Putnam Short Duration is currently generating about 0.15 per unit of risk. If you would invest 5,631 in Putnam Research Fund on August 28, 2024 and sell it today you would earn a total of 132.00 from holding Putnam Research Fund or generate 2.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putnam Research Fund vs. Putnam Short Duration
Performance |
| Timeline |
| Putnam Research |
| Putnam Short Duration |
Putnam Research and Putnam Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Research and Putnam Short
The main advantage of trading using opposite Putnam Research and Putnam Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Research 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 Research vs. Putnam Growth Opportunities | Putnam Research vs. Putnam International Equity | Putnam Research vs. George Putnam Fund | Putnam Research vs. Putnam Small Cap |
| Putnam Short vs. Alliancebernstein National Municipal | Putnam Short vs. Bbh Intermediate Municipal | Putnam Short vs. Gamco Global Telecommunications | Putnam Short vs. Oklahoma Municipal Fund |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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