Correlation Between Voya Target and Putnam Retirement
Can any of the company-specific risk be diversified away by investing in both Voya Target 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 Voya Target and Putnam Retirement into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Voya Target Retirement and Putnam Retirement Advantage, you can compare the effects of market volatilities on Voya Target 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 Voya Target with a short position of Putnam Retirement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Target and Putnam Retirement.
Diversification Opportunities for Voya Target and Putnam Retirement
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Voya and Putnam is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Voya Target Retirement and Putnam Retirement Advantage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Retirement and Voya Target 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 Voya Target Retirement 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 Voya Target i.e., Voya Target and Putnam Retirement go up and down completely randomly.
Pair Corralation between Voya Target and Putnam Retirement
Assuming the 90 days horizon Voya Target is expected to generate 1.65 times less return on investment than Putnam Retirement. But when comparing it to its historical volatility, Voya Target Retirement is 1.54 times less risky than Putnam Retirement. It trades about 0.07 of its potential returns per unit of risk. Putnam Retirement Advantage is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 849.00 in Putnam Retirement Advantage on October 11, 2024 and sell it today you would earn a total of 338.00 from holding Putnam Retirement Advantage or generate 39.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Voya Target Retirement vs. Putnam Retirement Advantage
Performance |
| Timeline |
| Voya Target Retirement |
| Putnam Retirement |
Voya Target and Putnam Retirement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya Target and Putnam Retirement
The main advantage of trading using opposite Voya Target and Putnam Retirement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Target 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.| Voya Target vs. Ultra Short Fixed Income | Voya Target vs. Siit Ultra Short | Voya Target vs. Aamhimco Short Duration | Voya Target vs. Touchstone Ultra Short |
| Putnam Retirement vs. Barings High Yield | Putnam Retirement vs. Fidelity Focused High | Putnam Retirement vs. Needham Aggressive Growth | Putnam Retirement vs. Millerhoward High Income |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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