Correlation Between Putnam Ultra and Ultra-short Fixed
Can any of the company-specific risk be diversified away by investing in both Putnam Ultra and Ultra-short Fixed 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 Ultra-short Fixed 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 Ultra Short Fixed Income, you can compare the effects of market volatilities on Putnam Ultra and Ultra-short Fixed 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 Ultra-short Fixed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Ultra and Ultra-short Fixed.
Diversification Opportunities for Putnam Ultra and Ultra-short Fixed
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Putnam and Ultra-short is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Ultra Short and Ultra Short Fixed Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ultra Short Fixed 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 Ultra-short Fixed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ultra Short Fixed has no effect on the direction of Putnam Ultra i.e., Putnam Ultra and Ultra-short Fixed go up and down completely randomly.
Pair Corralation between Putnam Ultra and Ultra-short Fixed
Assuming the 90 days horizon Putnam Ultra Short is expected to generate 1.04 times more return on investment than Ultra-short Fixed. However, Putnam Ultra is 1.04 times more volatile than Ultra Short Fixed Income. It trades about 0.18 of its potential returns per unit of risk. Ultra Short Fixed Income is currently generating about 0.18 per unit of risk. If you would invest 998.00 in Putnam Ultra Short on August 23, 2024 and sell it today you would earn a total of 12.00 from holding Putnam Ultra Short or generate 1.2% 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. Ultra Short Fixed Income
Performance |
| Timeline |
| Putnam Ultra Short |
| Ultra Short Fixed |
Putnam Ultra and Ultra-short Fixed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Ultra and Ultra-short Fixed
The main advantage of trading using opposite Putnam Ultra and Ultra-short Fixed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Ultra position performs unexpectedly, Ultra-short Fixed 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 Ultra-short Fixed will offset losses from the drop in Ultra-short Fixed's long position.| Putnam Ultra vs. Short Term Fund Administrative | Putnam Ultra vs. Lord Abbett Ultra | Putnam Ultra vs. Vanguard Ultra Short Term Bond | Putnam Ultra vs. Putnam Short Duration |
| Ultra-short Fixed vs. Short Term Fund Administrative | Ultra-short Fixed vs. Lord Abbett Ultra | Ultra-short Fixed vs. Vanguard Ultra Short Term Bond | Ultra-short Fixed vs. Putnam Short Duration |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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