Correlation Between College Retirement and Putnam Retirement
Can any of the company-specific risk be diversified away by investing in both College Retirement and Putnam Retirement 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 College Retirement and Putnam Retirement into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between College Retirement Equities and Putnam Retirement Advantage, you can compare the effects of market volatilities on College Retirement and Putnam Retirement 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 College Retirement with a short position of Putnam Retirement. Check out your portfolio center. Please also check ongoing floating volatility patterns of College Retirement and Putnam Retirement.
Diversification Opportunities for College Retirement and Putnam Retirement
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between College and Putnam is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding College Retirement Equities and Putnam Retirement Advantage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Retirement and College Retirement 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 College Retirement Equities are associated (or correlated) with Putnam Retirement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Retirement has no effect on the direction of College Retirement i.e., College Retirement and Putnam Retirement go up and down completely randomly.
Pair Corralation between College Retirement and Putnam Retirement
Assuming the 90 days trading horizon College Retirement Equities is expected to generate 0.97 times more return on investment than Putnam Retirement. However, College Retirement Equities is 1.03 times less risky than Putnam Retirement. It trades about 0.05 of its potential returns per unit of risk. Putnam Retirement Advantage is currently generating about 0.01 per unit of risk. If you would invest 34,055 in College Retirement Equities on October 19, 2024 and sell it today you would earn a total of 554.00 from holding College Retirement Equities or generate 1.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
College Retirement Equities vs. Putnam Retirement Advantage
Performance |
| Timeline |
| College Retirement |
| Putnam Retirement |
College Retirement and Putnam Retirement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with College Retirement and Putnam Retirement
The main advantage of trading using opposite College Retirement and Putnam Retirement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if College Retirement position performs unexpectedly, Putnam Retirement 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 Retirement will offset losses from the drop in Putnam Retirement's long position.| College Retirement vs. Vy Columbia Small | College Retirement vs. Needham Small Cap | College Retirement vs. Smallcap Fund Fka | College Retirement vs. Hunter Small Cap |
| Putnam Retirement vs. Putnam Equity Income | Putnam Retirement vs. Putnam Tax Exempt | Putnam Retirement vs. Putnam Floating Rate | Putnam Retirement 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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