Correlation Between Tax-managed and Putnam Small
Can any of the company-specific risk be diversified away by investing in both Tax-managed and Putnam Small 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 Tax-managed and Putnam Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tax Managed Large Cap and Putnam Small Cap, you can compare the effects of market volatilities on Tax-managed and Putnam Small 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 Tax-managed with a short position of Putnam Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tax-managed and Putnam Small.
Diversification Opportunities for Tax-managed and Putnam Small
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Tax-managed and Putnam is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Tax Managed Large Cap and Putnam Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Small Cap and Tax-managed 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 Tax Managed Large Cap are associated (or correlated) with Putnam Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Small Cap has no effect on the direction of Tax-managed i.e., Tax-managed and Putnam Small go up and down completely randomly.
Pair Corralation between Tax-managed and Putnam Small
Assuming the 90 days horizon Tax Managed Large Cap is expected to generate 0.75 times more return on investment than Putnam Small. However, Tax Managed Large Cap is 1.33 times less risky than Putnam Small. It trades about 0.1 of its potential returns per unit of risk. Putnam Small Cap is currently generating about 0.06 per unit of risk. If you would invest 6,109 in Tax Managed Large Cap on November 6, 2024 and sell it today you would earn a total of 2,575 from holding Tax Managed Large Cap or generate 42.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tax Managed Large Cap vs. Putnam Small Cap
Performance |
| Timeline |
| Tax Managed Large |
| Putnam Small Cap |
Tax-managed and Putnam Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tax-managed and Putnam Small
The main advantage of trading using opposite Tax-managed and Putnam Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tax-managed position performs unexpectedly, Putnam Small 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 Small will offset losses from the drop in Putnam Small's long position.| Tax-managed vs. Franklin Adjustable Government | Tax-managed vs. Siit High Yield | Tax-managed vs. Barings High Yield | Tax-managed vs. Ab Bond Inflation |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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