Correlation Between Alpine Ultra and Putnam Floating

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

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

Diversification Opportunities for Alpine Ultra and Putnam Floating

0.0

Correlation Coefficient

Alpine Ultra  Putnam Floating

Pay attention - limited upside

The 3 months correlation between Alpine and Putnam is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Alpine Ultra Short 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 Alpine Ultra 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 Alpine Ultra Short 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 Alpine Ultra i.e., Alpine Ultra and Putnam Floating go up and down completely randomly.

Pair Corralation between Alpine Ultra and Putnam Floating

Assuming the 90 days horizon Alpine Ultra is expected to generate 1.17 times less return on investment than Putnam Floating. But when comparing it to its historical volatility, Alpine Ultra Short is 1.9 times less risky than Putnam Floating. It trades about 0.19 of its potential returns per unit of risk. Putnam Floating Rate is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  786.00  in Putnam Floating Rate on October 8, 2024 and sell it today you would earn a total of  12.00  from holding Putnam Floating Rate or generate 1.53% return on investment over 90 days.

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

Alpine Ultra Short  vs.  Putnam Floating Rate

Alpine Ultra Short

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Alpine Ultra Short are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Alpine Ultra is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

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.

Pair Trading with Alpine Ultra and Putnam Floating

The main advantage of trading using opposite Alpine Ultra and Putnam Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alpine Ultra 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.

The idea behind Alpine Ultra Short and Putnam Floating Rate 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.