Correlation Between Putnam Premier and MFS Intermediate
Can any of the company-specific risk be diversified away by investing in both Putnam Premier and MFS Intermediate 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 Intermediate 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 Intermediate Income, you can compare the effects of market volatilities on Putnam Premier and MFS Intermediate 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 Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Premier and MFS Intermediate.
Diversification Opportunities for Putnam Premier and MFS Intermediate
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Putnam and MFS is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Premier Income and MFS Intermediate Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFS Intermediate Income 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 Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MFS Intermediate Income has no effect on the direction of Putnam Premier i.e., Putnam Premier and MFS Intermediate go up and down completely randomly.
Pair Corralation between Putnam Premier and MFS Intermediate
Considering the 90-day investment horizon Putnam Premier Income is expected to under-perform the MFS Intermediate. But the etf apears to be less risky and, when comparing its historical volatility, Putnam Premier Income is 1.01 times less risky than MFS Intermediate. The etf trades about -0.07 of its potential returns per unit of risk. The MFS Intermediate Income is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 270.00 in MFS Intermediate Income on August 28, 2024 and sell it today you would lose (1.00) from holding MFS Intermediate Income or give up 0.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Putnam Premier Income vs. MFS Intermediate Income
Performance |
| Timeline |
| Putnam Premier Income |
| MFS Intermediate Income |
Putnam Premier and MFS Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Premier and MFS Intermediate
The main advantage of trading using opposite Putnam Premier and MFS Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Premier position performs unexpectedly, MFS Intermediate 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 Intermediate will offset losses from the drop in MFS Intermediate's long position.| Putnam Premier vs. MFS High Yield | Putnam Premier vs. MFS High Income | Putnam Premier vs. Blackrock Muniholdings Quality | Putnam Premier vs. MFS Charter Income |
| MFS Intermediate vs. MFS Government Markets | MFS Intermediate vs. MFS Multimarket Income | MFS Intermediate vs. MFS Charter Income | MFS Intermediate vs. Putnam Premier Income |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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