Correlation Between Putnam Short and Pimco Short-term
Can any of the company-specific risk be diversified away by investing in both Putnam Short and Pimco Short-term 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 Short and Pimco Short-term into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Putnam Short Duration and Pimco Short Term Fund, you can compare the effects of market volatilities on Putnam Short and Pimco Short-term 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 Short with a short position of Pimco Short-term. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Short and Pimco Short-term.
Diversification Opportunities for Putnam Short and Pimco Short-term
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Putnam and Pimco is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Short Duration and Pimco Short Term Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Short Term and Putnam Short 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 Short Duration are associated (or correlated) with Pimco Short-term. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Short Term has no effect on the direction of Putnam Short i.e., Putnam Short and Pimco Short-term go up and down completely randomly.
Pair Corralation between Putnam Short and Pimco Short-term
Assuming the 90 days horizon Putnam Short Duration is not expected to generate positive returns. Moreover, Putnam Short is 1.11 times more volatile than Pimco Short Term Fund. It trades away all of its potential returns to assume current level of volatility. Pimco Short Term Fund is currently generating about 0.12 per unit of risk. If you would invest 965.00 in Pimco Short Term Fund on September 4, 2024 and sell it today you would earn a total of 1.00 from holding Pimco Short Term Fund or generate 0.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putnam Short Duration vs. Pimco Short Term Fund
Performance |
| Timeline |
| Putnam Short Duration |
| Pimco Short Term |
Putnam Short and Pimco Short-term Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Short and Pimco Short-term
The main advantage of trading using opposite Putnam Short and Pimco Short-term positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Short position performs unexpectedly, Pimco Short-term 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 Pimco Short-term will offset losses from the drop in Pimco Short-term's long position.| Putnam Short vs. Victory Rs Partners | Putnam Short vs. Boston Partners Small | Putnam Short vs. Heartland Value Plus | Putnam Short vs. Pace Smallmedium Value |
| Pimco Short-term vs. Short Term Fund A | Pimco Short-term vs. Pimco Senior Floating | Pimco Short-term vs. Pimco Floating Income | Pimco Short-term vs. Diversified Income Fund |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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