Correlation Between Scharf Global and Putnam Floating
Can any of the company-specific risk be diversified away by investing in both Scharf Global and Putnam Floating 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 Scharf Global and Putnam Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scharf Global Opportunity and Putnam Floating Rate, you can compare the effects of market volatilities on Scharf Global and Putnam Floating 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 Scharf Global with a short position of Putnam Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scharf Global and Putnam Floating.
Diversification Opportunities for Scharf Global and Putnam Floating
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Scharf and Putnam is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Scharf Global Opportunity and Putnam Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Floating Rate and Scharf Global 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 Scharf Global Opportunity are associated (or correlated) with Putnam Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Floating Rate has no effect on the direction of Scharf Global i.e., Scharf Global and Putnam Floating go up and down completely randomly.
Pair Corralation between Scharf Global and Putnam Floating
Assuming the 90 days horizon Scharf Global Opportunity is expected to generate 5.86 times more return on investment than Putnam Floating. However, Scharf Global is 5.86 times more volatile than Putnam Floating Rate. It trades about 0.14 of its potential returns per unit of risk. Putnam Floating Rate is currently generating about 0.28 per unit of risk. If you would invest 3,688 in Scharf Global Opportunity on August 24, 2024 and sell it today you would earn a total of 80.00 from holding Scharf Global Opportunity or generate 2.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scharf Global Opportunity vs. Putnam Floating Rate
Performance |
| Timeline |
| Scharf Global Opportunity |
| Putnam Floating Rate |
Scharf Global and Putnam Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scharf Global and Putnam Floating
The main advantage of trading using opposite Scharf Global and Putnam Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scharf Global position performs unexpectedly, Putnam Floating 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 Floating will offset losses from the drop in Putnam Floating's long position.| Scharf Global vs. Doubleline Emerging Markets | Scharf Global vs. Siit Emerging Markets | Scharf Global vs. Barings Emerging Markets | Scharf Global vs. Transamerica Emerging Markets |
| Putnam Floating vs. Scharf Global Opportunity | Putnam Floating vs. Kinetics Global Fund | Putnam Floating vs. Morgan Stanley Global | Putnam Floating vs. Ab Global Bond |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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