Correlation Between Rand Capital and Putnam High
Can any of the company-specific risk be diversified away by investing in both Rand Capital and Putnam High 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 Rand Capital and Putnam High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rand Capital Corp and Putnam High Income, you can compare the effects of market volatilities on Rand Capital and Putnam High 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 Rand Capital with a short position of Putnam High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rand Capital and Putnam High.
Diversification Opportunities for Rand Capital and Putnam High
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Rand and Putnam is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Rand Capital Corp and Putnam High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam High Income and Rand Capital 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 Rand Capital Corp are associated (or correlated) with Putnam High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam High Income has no effect on the direction of Rand Capital i.e., Rand Capital and Putnam High go up and down completely randomly.
Pair Corralation between Rand Capital and Putnam High
Given the investment horizon of 90 days Rand Capital Corp is expected to generate 1.78 times more return on investment than Putnam High. However, Rand Capital is 1.78 times more volatile than Putnam High Income. It trades about 0.13 of its potential returns per unit of risk. Putnam High Income is currently generating about 0.18 per unit of risk. If you would invest 1,613 in Rand Capital Corp on August 28, 2024 and sell it today you would earn a total of 36.00 from holding Rand Capital Corp or generate 2.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Rand Capital Corp vs. Putnam High Income
Performance |
| Timeline |
| Rand Capital Corp |
| Putnam High Income |
Rand Capital and Putnam High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rand Capital and Putnam High
The main advantage of trading using opposite Rand Capital and Putnam High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rand Capital position performs unexpectedly, Putnam High 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 High will offset losses from the drop in Putnam High's long position.| Rand Capital vs. PowerUp Acquisition Corp | Rand Capital vs. Aurora Innovation | Rand Capital vs. HUMANA INC | Rand Capital vs. Aquagold International |
| Putnam High vs. RiverNorthDoubleLine Strategic Opportunity | Putnam High vs. Cornerstone Strategic Return | Putnam High vs. Oxford Lane Capital | Putnam High vs. Horizon Technology Finance |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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