Correlation Between Putnam Ultra and Jpmorgan Managed
Can any of the company-specific risk be diversified away by investing in both Putnam Ultra and Jpmorgan Managed 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 Jpmorgan Managed 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 Jpmorgan Managed Income, you can compare the effects of market volatilities on Putnam Ultra and Jpmorgan Managed 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 Jpmorgan Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Ultra and Jpmorgan Managed.
Diversification Opportunities for Putnam Ultra and Jpmorgan Managed
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Putnam and Jpmorgan is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Ultra Short and Jpmorgan Managed Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Managed Income 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 Jpmorgan Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Managed Income has no effect on the direction of Putnam Ultra i.e., Putnam Ultra and Jpmorgan Managed go up and down completely randomly.
Pair Corralation between Putnam Ultra and Jpmorgan Managed
Assuming the 90 days horizon Putnam Ultra is expected to generate 1.01 times less return on investment than Jpmorgan Managed. But when comparing it to its historical volatility, Putnam Ultra Short is 1.01 times less risky than Jpmorgan Managed. It trades about 0.14 of its potential returns per unit of risk. Jpmorgan Managed Income is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 999.00 in Jpmorgan Managed Income on August 28, 2024 and sell it today you would earn a total of 3.00 from holding Jpmorgan Managed Income or generate 0.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putnam Ultra Short vs. Jpmorgan Managed Income
Performance |
| Timeline |
| Putnam Ultra Short |
| Jpmorgan Managed Income |
Putnam Ultra and Jpmorgan Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Ultra and Jpmorgan Managed
The main advantage of trading using opposite Putnam Ultra and Jpmorgan Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Ultra position performs unexpectedly, Jpmorgan Managed 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 Jpmorgan Managed will offset losses from the drop in Jpmorgan Managed's long position.| Putnam Ultra vs. Prudential Health Sciences | Putnam Ultra vs. Invesco Global Health | Putnam Ultra vs. Blackrock Health Sciences | Putnam Ultra vs. Allianzgi Health Sciences |
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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