Correlation Between Aqr Diversified and Putnam Equity
Can any of the company-specific risk be diversified away by investing in both Aqr Diversified and Putnam Equity 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 Aqr Diversified and Putnam Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aqr Diversified Arbitrage and Putnam Equity Income, you can compare the effects of market volatilities on Aqr Diversified and Putnam Equity 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 Aqr Diversified with a short position of Putnam Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Diversified and Putnam Equity.
Diversification Opportunities for Aqr Diversified and Putnam Equity
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aqr and Putnam is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Diversified Arbitrage and Putnam Equity Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Equity Income and Aqr Diversified 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 Aqr Diversified Arbitrage are associated (or correlated) with Putnam Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Equity Income has no effect on the direction of Aqr Diversified i.e., Aqr Diversified and Putnam Equity go up and down completely randomly.
Pair Corralation between Aqr Diversified and Putnam Equity
Assuming the 90 days horizon Aqr Diversified is expected to generate 4.99 times less return on investment than Putnam Equity. But when comparing it to its historical volatility, Aqr Diversified Arbitrage is 2.59 times less risky than Putnam Equity. It trades about 0.07 of its potential returns per unit of risk. Putnam Equity Income is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 2,732 in Putnam Equity Income on August 31, 2024 and sell it today you would earn a total of 1,078 from holding Putnam Equity Income or generate 39.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqr Diversified Arbitrage vs. Putnam Equity Income
Performance |
| Timeline |
| Aqr Diversified Arbitrage |
| Putnam Equity Income |
Aqr Diversified and Putnam Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Diversified and Putnam Equity
The main advantage of trading using opposite Aqr Diversified and Putnam Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Diversified position performs unexpectedly, Putnam Equity 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 Equity will offset losses from the drop in Putnam Equity's long position.| Aqr Diversified vs. Franklin Lifesmart Retirement | Aqr Diversified vs. Transamerica Cleartrack Retirement | Aqr Diversified vs. Multimanager Lifestyle Moderate | Aqr Diversified vs. Saat Moderate Strategy |
| Putnam Equity vs. Huber Capital Diversified | Putnam Equity vs. Aqr Diversified Arbitrage | Putnam Equity vs. Pgim Conservative Retirement | Putnam Equity vs. Pioneer Diversified High |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |