Correlation Between Micron Technology and Putnam Short
Can any of the company-specific risk be diversified away by investing in both Micron Technology and Putnam Short 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 Micron Technology and Putnam Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Micron Technology and Putnam Short Duration, you can compare the effects of market volatilities on Micron Technology and Putnam Short 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 Micron Technology with a short position of Putnam Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Micron Technology and Putnam Short.
Diversification Opportunities for Micron Technology and Putnam Short
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Micron and Putnam is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and Putnam Short Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Short Duration and Micron Technology 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 Micron Technology are associated (or correlated) with Putnam Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Short Duration has no effect on the direction of Micron Technology i.e., Micron Technology and Putnam Short go up and down completely randomly.
Pair Corralation between Micron Technology and Putnam Short
Allowing for the 90-day total investment horizon Micron Technology is expected to generate 29.77 times more return on investment than Putnam Short. However, Micron Technology is 29.77 times more volatile than Putnam Short Duration. It trades about 0.06 of its potential returns per unit of risk. Putnam Short Duration is currently generating about 0.21 per unit of risk. If you would invest 4,988 in Micron Technology on September 23, 2024 and sell it today you would earn a total of 4,024 from holding Micron Technology or generate 80.67% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Micron Technology vs. Putnam Short Duration
Performance |
Timeline |
Micron Technology |
Putnam Short Duration |
Micron Technology and Putnam Short Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Micron Technology and Putnam Short
The main advantage of trading using opposite Micron Technology and Putnam Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Micron Technology position performs unexpectedly, Putnam Short 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 Short will offset losses from the drop in Putnam Short's long position.Micron Technology vs. Diodes Incorporated | Micron Technology vs. Daqo New Energy | Micron Technology vs. MagnaChip Semiconductor | Micron Technology vs. Nano Labs |
Putnam Short vs. Putnam Equity Income | Putnam Short vs. Putnam Tax Exempt | Putnam Short vs. Putnam Floating Rate | Putnam Short vs. Putnam High Yield |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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