Correlation Between Armada Hflr and Putnam Retirementready

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

By analyzing existing cross correlation between Armada Hflr Pr and Putnam Retirementready 2035, you can compare the effects of market volatilities on Armada Hflr and Putnam Retirementready 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 Armada Hflr with a short position of Putnam Retirementready. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armada Hflr and Putnam Retirementready.

Diversification Opportunities for Armada Hflr and Putnam Retirementready

0.29

Correlation Coefficient

Armada Hflr  Putnam Retirementready

Modest diversification

The 3 months correlation between Armada and Putnam is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and Putnam Retirementready 2035 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Retirementready and Armada Hflr 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 Armada Hflr Pr are associated (or correlated) with Putnam Retirementready. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Retirementready has no effect on the direction of Armada Hflr i.e., Armada Hflr and Putnam Retirementready go up and down completely randomly.

Pair Corralation between Armada Hflr and Putnam Retirementready

Considering the 90-day investment horizon Armada Hflr Pr is expected to under-perform the Putnam Retirementready. In addition to that, Armada Hflr is 2.06 times more volatile than Putnam Retirementready 2035. It trades about -0.26 of its total potential returns per unit of risk. Putnam Retirementready 2035 is currently generating about -0.19 per unit of volatility. If you would invest  2,989  in Putnam Retirementready 2035 on September 27, 2024 and sell it today you would lose (72.00) from holding Putnam Retirementready 2035 or give up 2.41% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

Armada Hflr Pr  vs.  Putnam Retirementready 2035

Armada Hflr Pr

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Armada Hflr Pr has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical indicators, Armada Hflr is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Putnam Retirementready

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Putnam Retirementready 2035 has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Putnam Retirementready is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Armada Hflr and Putnam Retirementready

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

The idea behind Armada Hflr Pr and Putnam Retirementready 2035 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.