Correlation Between Putnam Premier and MFS Investment
Can any of the company-specific risk be diversified away by investing in both Putnam Premier and MFS Investment 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 Premier and MFS Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Putnam Premier Income and MFS Investment Grade, you can compare the effects of market volatilities on Putnam Premier and MFS Investment 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 Premier with a short position of MFS Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Premier and MFS Investment.
Diversification Opportunities for Putnam Premier and MFS Investment
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Putnam and MFS is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Premier Income and MFS Investment Grade in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFS Investment Grade and Putnam Premier 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 Premier Income are associated (or correlated) with MFS Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MFS Investment Grade has no effect on the direction of Putnam Premier i.e., Putnam Premier and MFS Investment go up and down completely randomly.
Pair Corralation between Putnam Premier and MFS Investment
Considering the 90-day investment horizon Putnam Premier is expected to generate 1.24 times less return on investment than MFS Investment. In addition to that, Putnam Premier is 1.02 times more volatile than MFS Investment Grade. It trades about 0.05 of its total potential returns per unit of risk. MFS Investment Grade is currently generating about 0.07 per unit of volatility. If you would invest 662.00 in MFS Investment Grade on September 12, 2024 and sell it today you would earn a total of 167.00 from holding MFS Investment Grade or generate 25.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putnam Premier Income vs. MFS Investment Grade
Performance |
| Timeline |
| Putnam Premier Income |
| MFS Investment Grade |
Putnam Premier and MFS Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Premier and MFS Investment
The main advantage of trading using opposite Putnam Premier and MFS Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Premier position performs unexpectedly, MFS Investment 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 MFS Investment will offset losses from the drop in MFS Investment's long position.| Putnam Premier vs. MFS Investment Grade | Putnam Premier vs. Eaton Vance National | Putnam Premier vs. Federated Premier Municipal | Putnam Premier vs. Gabelli Healthcare WellnessRx |
| MFS Investment vs. Freedom Bank of | MFS Investment vs. HUMANA INC | MFS Investment vs. Barloworld Ltd ADR | MFS Investment vs. Morningstar Unconstrained 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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