Correlation Between Putnam Retirement and Putnam Floating
Can any of the company-specific risk be diversified away by investing in both Putnam Retirement 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 Putnam Retirement and Putnam Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Putnam Retirement Income and Putnam Floating Rate, you can compare the effects of market volatilities on Putnam Retirement 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 Putnam Retirement with a short position of Putnam Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Retirement and Putnam Floating.
Diversification Opportunities for Putnam Retirement and Putnam Floating
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Putnam and Putnam is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Retirement Income 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 Putnam Retirement 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 Retirement Income 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 Putnam Retirement i.e., Putnam Retirement and Putnam Floating go up and down completely randomly.
Pair Corralation between Putnam Retirement and Putnam Floating
Assuming the 90 days horizon Putnam Retirement Income is expected to under-perform the Putnam Floating. In addition to that, Putnam Retirement is 5.96 times more volatile than Putnam Floating Rate. It trades about -0.2 of its total potential returns per unit of risk. Putnam Floating Rate is currently generating about -0.1 per unit of volatility. If you would invest 801.00 in Putnam Floating Rate on September 26, 2024 and sell it today you would lose (1.00) from holding Putnam Floating Rate or give up 0.12% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Putnam Retirement Income vs. Putnam Floating Rate
Performance |
Timeline |
Putnam Retirement Income |
Putnam Floating Rate |
Putnam Retirement and Putnam Floating Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Putnam Retirement and Putnam Floating
The main advantage of trading using opposite Putnam Retirement and Putnam Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Retirement 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.Putnam Retirement vs. Putnam Equity Income | Putnam Retirement vs. Putnam Tax Exempt | Putnam Retirement vs. Putnam Floating Rate | Putnam Retirement vs. Putnam High Yield |
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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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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