Correlation Between Putnam Short and Easterly Snow
Can any of the company-specific risk be diversified away by investing in both Putnam Short and Easterly Snow 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 Easterly Snow 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 Easterly Snow Small, you can compare the effects of market volatilities on Putnam Short and Easterly Snow 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 Easterly Snow. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Short and Easterly Snow.
Diversification Opportunities for Putnam Short and Easterly Snow
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Putnam and Easterly is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Short Duration and Easterly Snow Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Easterly Snow Small 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 Easterly Snow. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Easterly Snow Small has no effect on the direction of Putnam Short i.e., Putnam Short and Easterly Snow go up and down completely randomly.
Pair Corralation between Putnam Short and Easterly Snow
Assuming the 90 days horizon Putnam Short is expected to generate 4.89 times less return on investment than Easterly Snow. But when comparing it to its historical volatility, Putnam Short Duration is 14.88 times less risky than Easterly Snow. It trades about 0.21 of its potential returns per unit of risk. Easterly Snow Small is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 5,809 in Easterly Snow Small on September 14, 2024 and sell it today you would earn a total of 650.00 from holding Easterly Snow Small or generate 11.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putnam Short Duration vs. Easterly Snow Small
Performance |
| Timeline |
| Putnam Short Duration |
| Easterly Snow Small |
Putnam Short and Easterly Snow Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Short and Easterly Snow
The main advantage of trading using opposite Putnam Short and Easterly Snow positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Short position performs unexpectedly, Easterly Snow 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 Easterly Snow will offset losses from the drop in Easterly Snow'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 |
| Easterly Snow vs. Easterly Snow Longshort | Easterly Snow vs. Calvert Aggressive Allocation | Easterly Snow vs. Vanguard 500 Index | Easterly Snow 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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