Correlation Between Siit Emerging and Putnam Dynamic
Can any of the company-specific risk be diversified away by investing in both Siit Emerging and Putnam Dynamic 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 Siit Emerging and Putnam Dynamic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Siit Emerging Markets and Putnam Dynamic Asset, you can compare the effects of market volatilities on Siit Emerging and Putnam Dynamic 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 Siit Emerging with a short position of Putnam Dynamic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siit Emerging and Putnam Dynamic.
Diversification Opportunities for Siit Emerging and Putnam Dynamic
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Siit and PUTNAM is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Siit Emerging Markets and Putnam Dynamic Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Dynamic Asset and Siit Emerging 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 Siit Emerging Markets are associated (or correlated) with Putnam Dynamic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Dynamic Asset has no effect on the direction of Siit Emerging i.e., Siit Emerging and Putnam Dynamic go up and down completely randomly.
Pair Corralation between Siit Emerging and Putnam Dynamic
Assuming the 90 days horizon Siit Emerging is expected to generate 1.24 times less return on investment than Putnam Dynamic. But when comparing it to its historical volatility, Siit Emerging Markets is 1.94 times less risky than Putnam Dynamic. It trades about 0.22 of its potential returns per unit of risk. Putnam Dynamic Asset is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,597 in Putnam Dynamic Asset on October 24, 2024 and sell it today you would earn a total of 26.00 from holding Putnam Dynamic Asset or generate 1.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Siit Emerging Markets vs. Putnam Dynamic Asset
Performance |
| Timeline |
| Siit Emerging Markets |
| Putnam Dynamic Asset |
Siit Emerging and Putnam Dynamic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siit Emerging and Putnam Dynamic
The main advantage of trading using opposite Siit Emerging and Putnam Dynamic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siit Emerging position performs unexpectedly, Putnam Dynamic 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 Dynamic will offset losses from the drop in Putnam Dynamic's long position.| Siit Emerging vs. Franklin Adjustable Government | Siit Emerging vs. Lord Abbett Intermediate | Siit Emerging vs. Morningstar Municipal Bond | Siit Emerging vs. Thornburg Strategic Municipal |
| Putnam Dynamic vs. Gold Portfolio Fidelity | Putnam Dynamic vs. Oppenheimer Gold Special | Putnam Dynamic vs. The Gold Bullion | Putnam Dynamic vs. World Precious Minerals |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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