Correlation Between Rbb Fund and Putnam ETF

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

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

Diversification Opportunities for Rbb Fund and Putnam ETF

-0.6

Correlation Coefficient

Rbb Fund  Putnam ETF

Excellent diversification

The 3 months correlation between Rbb and Putnam is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Rbb Fund and Putnam ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam ETF Trust and Rbb Fund 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 Rbb Fund are associated (or correlated) with Putnam ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam ETF Trust has no effect on the direction of Rbb Fund i.e., Rbb Fund and Putnam ETF go up and down completely randomly.

Pair Corralation between Rbb Fund and Putnam ETF

Given the investment horizon of 90 days Rbb Fund is expected to generate 2.71 times more return on investment than Putnam ETF. However, Rbb Fund is 2.71 times more volatile than Putnam ETF Trust. It trades about 0.12 of its potential returns per unit of risk. Putnam ETF Trust is currently generating about -0.04 per unit of risk. If you would invest  3,440  in Rbb Fund on September 2, 2024 and sell it today you would earn a total of  241.00  from holding Rbb Fund or generate 7.01% return on investment over 90 days.

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

Rbb Fund   vs.  Putnam ETF Trust

Rbb Fund

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Rbb Fund are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak essential indicators, Rbb Fund may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Putnam ETF Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Putnam ETF Trust has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Putnam ETF is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Rbb Fund and Putnam ETF

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

The idea behind Rbb Fund and Putnam ETF Trust 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.