Correlation Between Ab Small and Putnam Equity
Can any of the company-specific risk be diversified away by investing in both Ab Small 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 Ab Small and Putnam Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Small Cap and Putnam Equity Income, you can compare the effects of market volatilities on Ab Small 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 Ab Small with a short position of Putnam Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Small and Putnam Equity.
Diversification Opportunities for Ab Small and Putnam Equity
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between QUAIX and Putnam is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Ab Small Cap 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 Ab Small 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 Ab Small Cap 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 Ab Small i.e., Ab Small and Putnam Equity go up and down completely randomly.
Pair Corralation between Ab Small and Putnam Equity
Assuming the 90 days horizon Ab Small Cap is expected to generate 1.79 times more return on investment than Putnam Equity. However, Ab Small is 1.79 times more volatile than Putnam Equity Income. It trades about 0.06 of its potential returns per unit of risk. Putnam Equity Income is currently generating about 0.11 per unit of risk. If you would invest 5,577 in Ab Small Cap on September 3, 2024 and sell it today you would earn a total of 2,333 from holding Ab Small Cap or generate 41.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Small Cap vs. Putnam Equity Income
Performance |
| Timeline |
| Ab Small Cap |
| Putnam Equity Income |
Ab Small and Putnam Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Small and Putnam Equity
The main advantage of trading using opposite Ab Small and Putnam Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Small 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.| Ab Small vs. Principal Lifetime Hybrid | Ab Small vs. Semiconductor Ultrasector Profund | Ab Small vs. Issachar Fund Class | Ab Small vs. Federated Mdt Large |
| Putnam Equity vs. Dodge Cox Stock | Putnam Equity vs. American Funds American | Putnam Equity vs. American Funds American | Putnam Equity vs. American Mutual Fund |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |