Correlation Between Putnam Ultra and Six Circles
Can any of the company-specific risk be diversified away by investing in both Putnam Ultra and Six Circles 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 Ultra and Six Circles into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Putnam Ultra Short and Six Circles Tax, you can compare the effects of market volatilities on Putnam Ultra and Six Circles 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 Ultra with a short position of Six Circles. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Ultra and Six Circles.
Diversification Opportunities for Putnam Ultra and Six Circles
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Putnam and Six is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Ultra Short and Six Circles Tax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Six Circles Tax and Putnam Ultra 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 Ultra Short are associated (or correlated) with Six Circles. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Six Circles Tax has no effect on the direction of Putnam Ultra i.e., Putnam Ultra and Six Circles go up and down completely randomly.
Pair Corralation between Putnam Ultra and Six Circles
Assuming the 90 days horizon Putnam Ultra Short is expected to generate 2.24 times more return on investment than Six Circles. However, Putnam Ultra is 2.24 times more volatile than Six Circles Tax. It trades about 0.22 of its potential returns per unit of risk. Six Circles Tax is currently generating about 0.34 per unit of risk. If you would invest 933.00 in Putnam Ultra Short on August 31, 2024 and sell it today you would earn a total of 78.00 from holding Putnam Ultra Short or generate 8.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putnam Ultra Short vs. Six Circles Tax
Performance |
| Timeline |
| Putnam Ultra Short |
| Six Circles Tax |
Putnam Ultra and Six Circles Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Ultra and Six Circles
The main advantage of trading using opposite Putnam Ultra and Six Circles positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Ultra position performs unexpectedly, Six Circles 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 Six Circles will offset losses from the drop in Six Circles' long position.| Putnam Ultra vs. Nuveen Minnesota Municipal | Putnam Ultra vs. T Rowe Price | Putnam Ultra vs. Pace Municipal Fixed | Putnam Ultra vs. T Rowe Price |
| Six Circles vs. Six Circles Ultra | Six Circles vs. Six Circles Unconstrained | Six Circles vs. Six Circles Managed | Six Circles vs. Six Circles Managed |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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