Correlation Between Sprott Gold and Putnam High
Can any of the company-specific risk be diversified away by investing in both Sprott Gold 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 Sprott Gold and Putnam High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sprott Gold Equity and Putnam High Yield, you can compare the effects of market volatilities on Sprott Gold 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 Sprott Gold with a short position of Putnam High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sprott Gold and Putnam High.
Diversification Opportunities for Sprott Gold and Putnam High
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sprott and Putnam is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Sprott Gold Equity and Putnam High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam High Yield and Sprott Gold 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 Sprott Gold Equity 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 Yield has no effect on the direction of Sprott Gold i.e., Sprott Gold and Putnam High go up and down completely randomly.
Pair Corralation between Sprott Gold and Putnam High
Assuming the 90 days horizon Sprott Gold Equity is expected to generate 6.83 times more return on investment than Putnam High. However, Sprott Gold is 6.83 times more volatile than Putnam High Yield. It trades about 0.32 of its potential returns per unit of risk. Putnam High Yield is currently generating about 0.26 per unit of risk. If you would invest 5,174 in Sprott Gold Equity on October 25, 2024 and sell it today you would earn a total of 421.00 from holding Sprott Gold Equity or generate 8.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sprott Gold Equity vs. Putnam High Yield
Performance |
| Timeline |
| Sprott Gold Equity |
| Putnam High Yield |
Sprott Gold and Putnam High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sprott Gold and Putnam High
The main advantage of trading using opposite Sprott Gold and Putnam High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sprott Gold 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.| Sprott Gold vs. Sprott Junior Gold | Sprott Gold vs. Sprott Gold Miners | Sprott Gold vs. Europac Gold Fund | Sprott Gold vs. US Global GO |
| Putnam High vs. Elfun Government Money | Putnam High vs. Short Term Government Fund | Putnam High vs. Prudential Government Money | Putnam High vs. Us Government Securities |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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