Correlation Between Moderately Aggressive and Putnam Retirement
Can any of the company-specific risk be diversified away by investing in both Moderately Aggressive 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 Moderately Aggressive and Putnam Retirement into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Moderately Aggressive Balanced and Putnam Retirement Advantage, you can compare the effects of market volatilities on Moderately Aggressive 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 Moderately Aggressive with a short position of Putnam Retirement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Moderately Aggressive and Putnam Retirement.
Diversification Opportunities for Moderately Aggressive and Putnam Retirement
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Moderately and Putnam is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Moderately Aggressive Balanced and Putnam Retirement Advantage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Retirement and Moderately Aggressive 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 Moderately Aggressive Balanced 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 Moderately Aggressive i.e., Moderately Aggressive and Putnam Retirement go up and down completely randomly.
Pair Corralation between Moderately Aggressive and Putnam Retirement
Assuming the 90 days horizon Moderately Aggressive Balanced is expected to generate 0.48 times more return on investment than Putnam Retirement. However, Moderately Aggressive Balanced is 2.09 times less risky than Putnam Retirement. It trades about -0.15 of its potential returns per unit of risk. Putnam Retirement Advantage is currently generating about -0.22 per unit of risk. If you would invest 1,214 in Moderately Aggressive Balanced on October 10, 2024 and sell it today you would lose (27.00) from holding Moderately Aggressive Balanced or give up 2.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Moderately Aggressive Balanced vs. Putnam Retirement Advantage
Performance |
| Timeline |
| Moderately Aggressive |
| Putnam Retirement |
Moderately Aggressive and Putnam Retirement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Moderately Aggressive and Putnam Retirement
The main advantage of trading using opposite Moderately Aggressive and Putnam Retirement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Moderately Aggressive 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.| Moderately Aggressive vs. Virtus Seix Government | Moderately Aggressive vs. Davis Government Bond | Moderately Aggressive vs. American Funds Government | Moderately Aggressive vs. Ridgeworth Seix Government |
| Putnam Retirement vs. Columbia Real Estate | Putnam Retirement vs. Neuberger Berman Real | Putnam Retirement vs. Vy Clarion Real | Putnam Retirement vs. Deutsche Real Estate |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |