Correlation Between Putnam Ohio and T Rowe
Can any of the company-specific risk be diversified away by investing in both Putnam Ohio and T Rowe 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 Ohio and T Rowe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Putnam Ohio Tax and T Rowe Price, you can compare the effects of market volatilities on Putnam Ohio and T Rowe 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 Ohio with a short position of T Rowe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Ohio and T Rowe.
Diversification Opportunities for Putnam Ohio and T Rowe
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Putnam and TRBCX is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Ohio Tax and T Rowe Price in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T Rowe Price and Putnam Ohio 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 Ohio Tax are associated (or correlated) with T Rowe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of T Rowe Price has no effect on the direction of Putnam Ohio i.e., Putnam Ohio and T Rowe go up and down completely randomly.
Pair Corralation between Putnam Ohio and T Rowe
Assuming the 90 days horizon Putnam Ohio Tax is expected to generate 0.17 times more return on investment than T Rowe. However, Putnam Ohio Tax is 5.77 times less risky than T Rowe. It trades about 0.03 of its potential returns per unit of risk. T Rowe Price is currently generating about -0.03 per unit of risk. If you would invest 830.00 in Putnam Ohio Tax on October 24, 2024 and sell it today you would earn a total of 1.00 from holding Putnam Ohio Tax or generate 0.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putnam Ohio Tax vs. T Rowe Price
Performance |
| Timeline |
| Putnam Ohio Tax |
| T Rowe Price |
Putnam Ohio and T Rowe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Ohio and T Rowe
The main advantage of trading using opposite Putnam Ohio and T Rowe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Ohio position performs unexpectedly, T Rowe 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 T Rowe will offset losses from the drop in T Rowe's long position.| Putnam Ohio vs. Putnam Equity Income | Putnam Ohio vs. Putnam Tax Exempt | Putnam Ohio vs. Putnam Floating Rate | Putnam Ohio vs. Putnam High Yield |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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