Correlation Between Putnam Floating and Putnam Massachusetts

Can any of the company-specific risk be diversified away by investing in both Putnam Floating and Putnam Massachusetts 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 Putnam Floating and Putnam Massachusetts into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Putnam Floating Rate and Putnam Massachusetts Tax, you can compare the effects of market volatilities on Putnam Floating and Putnam Massachusetts 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 Putnam Floating with a short position of Putnam Massachusetts. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Floating and Putnam Massachusetts.

Diversification Opportunities for Putnam Floating and Putnam Massachusetts

0.15

Correlation Coefficient

Putnam Floating  Putnam Massachusetts

Average diversification

The 3 months correlation between Putnam and Putnam is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Floating Rate and Putnam Massachusetts Tax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Massachusetts Tax and Putnam Floating 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 Putnam Floating Rate are associated (or correlated) with Putnam Massachusetts. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Massachusetts Tax has no effect on the direction of Putnam Floating i.e., Putnam Floating and Putnam Massachusetts go up and down completely randomly.

Pair Corralation between Putnam Floating and Putnam Massachusetts

Assuming the 90 days horizon Putnam Floating Rate is not expected to generate positive returns. However, Putnam Floating Rate is 11.05 times less risky than Putnam Massachusetts. It waists most of its returns potential to compensate for thr risk taken. Putnam Massachusetts is generating about 0.05 per unit of risk. If you would invest  907.00  in Putnam Massachusetts Tax on September 2, 2024 and sell it today you would earn a total of  7.00  from holding Putnam Massachusetts Tax or generate 0.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Putnam Floating Rate  vs.  Putnam Massachusetts Tax

Putnam Floating Rate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Putnam Floating Rate has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental drivers, Putnam Floating is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Putnam Massachusetts Tax

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Putnam Massachusetts Tax are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Putnam Massachusetts is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Putnam Floating and Putnam Massachusetts

The main advantage of trading using opposite Putnam Floating and Putnam Massachusetts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Floating position performs unexpectedly, Putnam Massachusetts 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 Massachusetts will offset losses from the drop in Putnam Massachusetts' long position.

The idea behind Putnam Floating Rate and Putnam Massachusetts Tax pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.