Correlation Between Putnam Short and Us Government
Can any of the company-specific risk be diversified away by investing in both Putnam Short and Us Government 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 Us Government 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 Us Government Securities, you can compare the effects of market volatilities on Putnam Short and Us Government 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 Us Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Short and Us Government.
Diversification Opportunities for Putnam Short and Us Government
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Putnam and CGTCX is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Short Duration and Us Government Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Us Government Securities 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 Us Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Us Government Securities has no effect on the direction of Putnam Short i.e., Putnam Short and Us Government go up and down completely randomly.
Pair Corralation between Putnam Short and Us Government
Assuming the 90 days horizon Putnam Short Duration is expected to generate 0.28 times more return on investment than Us Government. However, Putnam Short Duration is 3.56 times less risky than Us Government. It trades about 0.22 of its potential returns per unit of risk. Us Government Securities is currently generating about 0.04 per unit of risk. If you would invest 959.00 in Putnam Short Duration on September 4, 2024 and sell it today you would earn a total of 53.00 from holding Putnam Short Duration or generate 5.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Putnam Short Duration vs. Us Government Securities
Performance |
| Timeline |
| Putnam Short Duration |
| Us Government Securities |
Putnam Short and Us Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Short and Us Government
The main advantage of trading using opposite Putnam Short and Us Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Short position performs unexpectedly, Us Government 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 Us Government will offset losses from the drop in Us Government's long position.| Putnam Short vs. Putnam Equity Income | Putnam Short vs. Putnam Tax Exempt | Putnam Short vs. Putnam Floating Rate | Putnam Short vs. Putnam High Yield |
| Us Government vs. Income Fund Of | Us Government vs. American Mutual Fund | Us Government vs. American Mutual Fund | Us Government vs. American Funds 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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