Correlation Between US Treasury and Putnam ETF
Can any of the company-specific risk be diversified away by investing in both US Treasury and Putnam ETF 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 US Treasury and Putnam ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between US Treasury 30 and Putnam ETF Trust, you can compare the effects of market volatilities on US Treasury and Putnam ETF 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 US Treasury with a short position of Putnam ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Treasury and Putnam ETF.
Diversification Opportunities for US Treasury and Putnam ETF
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between UTHY and Putnam is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding US Treasury 30 and Putnam ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam ETF Trust and US Treasury 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 US Treasury 30 are associated (or correlated) with Putnam ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam ETF Trust has no effect on the direction of US Treasury i.e., US Treasury and Putnam ETF go up and down completely randomly.
Pair Corralation between US Treasury and Putnam ETF
Given the investment horizon of 90 days US Treasury is expected to generate 2.37 times less return on investment than Putnam ETF. In addition to that, US Treasury is 2.6 times more volatile than Putnam ETF Trust. It trades about 0.01 of its total potential returns per unit of risk. Putnam ETF Trust is currently generating about 0.07 per unit of volatility. If you would invest 4,707 in Putnam ETF Trust on September 1, 2024 and sell it today you would earn a total of 195.00 from holding Putnam ETF Trust or generate 4.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.47% |
| Values | Daily Returns |
US Treasury 30 vs. Putnam ETF Trust
Performance |
| Timeline |
| US Treasury 30 |
| Putnam ETF Trust |
US Treasury and Putnam ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with US Treasury and Putnam ETF
The main advantage of trading using opposite US Treasury and Putnam ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US Treasury position performs unexpectedly, Putnam ETF 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 ETF will offset losses from the drop in Putnam ETF's long position.| US Treasury vs. SPDR Barclays Short | US Treasury vs. SPDR Portfolio Intermediate | US Treasury vs. SPDR Barclays Long | US Treasury vs. SPDR Barclays Intermediate |
| Putnam ETF vs. Schwab International Equity | Putnam ETF vs. Schwab Emerging Markets | Putnam ETF vs. Schwab Short Term Treasury | Putnam ETF vs. Schwab TIPS ETF |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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