Correlation Between Pimco Total and Putnam U
Can any of the company-specific risk be diversified away by investing in both Pimco Total and Putnam U 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 Pimco Total and Putnam U into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pimco Total Return and Putnam U S, you can compare the effects of market volatilities on Pimco Total and Putnam U 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 Pimco Total with a short position of Putnam U. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Total and Putnam U.
Diversification Opportunities for Pimco Total and Putnam U
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Pimco and Putnam is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Total Return and Putnam U S in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam U S and Pimco Total 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 Pimco Total Return are associated (or correlated) with Putnam U. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam U S has no effect on the direction of Pimco Total i.e., Pimco Total and Putnam U go up and down completely randomly.
Pair Corralation between Pimco Total and Putnam U
Assuming the 90 days horizon Pimco Total is expected to generate 1.35 times less return on investment than Putnam U. But when comparing it to its historical volatility, Pimco Total Return is 1.28 times less risky than Putnam U. It trades about 0.16 of its potential returns per unit of risk. Putnam U S is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 819.00 in Putnam U S on September 2, 2024 and sell it today you would earn a total of 13.00 from holding Putnam U S or generate 1.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco Total Return vs. Putnam U S
Performance |
| Timeline |
| Pimco Total Return |
| Putnam U S |
Pimco Total and Putnam U Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Total and Putnam U
The main advantage of trading using opposite Pimco Total and Putnam U positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Total position performs unexpectedly, Putnam U 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 Putnam U will offset losses from the drop in Putnam U's long position.| Pimco Total vs. Pimco Rae Worldwide | Pimco Total vs. Pimco Rae Worldwide | Pimco Total vs. Pimco Rae Worldwide | Pimco Total vs. Pimco Rae Worldwide |
| Putnam U vs. Putnam Equity Income | Putnam U vs. Putnam Tax Exempt | Putnam U vs. Putnam Floating Rate | Putnam U vs. Putnam High Yield |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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