Correlation Between Moderate Balanced and Putnam Retirement
Can any of the company-specific risk be diversified away by investing in both Moderate Balanced 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 Moderate Balanced and Putnam Retirement into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Moderate Balanced Allocation and Putnam Retirement Advantage, you can compare the effects of market volatilities on Moderate Balanced 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 Moderate Balanced with a short position of Putnam Retirement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Moderate Balanced and Putnam Retirement.
Diversification Opportunities for Moderate Balanced and Putnam Retirement
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Moderate and Putnam is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Moderate Balanced Allocation and Putnam Retirement Advantage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Retirement and Moderate Balanced 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 Moderate Balanced Allocation 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 Moderate Balanced i.e., Moderate Balanced and Putnam Retirement go up and down completely randomly.
Pair Corralation between Moderate Balanced and Putnam Retirement
Assuming the 90 days horizon Moderate Balanced Allocation is expected to generate 0.54 times more return on investment than Putnam Retirement. However, Moderate Balanced Allocation is 1.86 times less risky than Putnam Retirement. It trades about -0.27 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 1,229 in Moderate Balanced Allocation on October 10, 2024 and sell it today you would lose (55.00) from holding Moderate Balanced Allocation or give up 4.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Moderate Balanced Allocation vs. Putnam Retirement Advantage
Performance |
| Timeline |
| Moderate Balanced |
| Putnam Retirement |
Moderate Balanced and Putnam Retirement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Moderate Balanced and Putnam Retirement
The main advantage of trading using opposite Moderate Balanced and Putnam Retirement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Moderate Balanced 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.| Moderate Balanced vs. Profunds Large Cap Growth | Moderate Balanced vs. Guidemark Large Cap | Moderate Balanced vs. Qs Large Cap | Moderate Balanced vs. Fundamental Large Cap |
| 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |