Correlation Between Invesco CurrencyShares and Putnam Focused
Can any of the company-specific risk be diversified away by investing in both Invesco CurrencyShares and Putnam Focused 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 Invesco CurrencyShares and Putnam Focused into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco CurrencyShares Japanese and Putnam Focused Large, you can compare the effects of market volatilities on Invesco CurrencyShares and Putnam Focused 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 Invesco CurrencyShares with a short position of Putnam Focused. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco CurrencyShares and Putnam Focused.
Diversification Opportunities for Invesco CurrencyShares and Putnam Focused
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Invesco and Putnam is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Invesco CurrencyShares Japanes and Putnam Focused Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Focused Large and Invesco CurrencyShares 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 Invesco CurrencyShares Japanese are associated (or correlated) with Putnam Focused. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Focused Large has no effect on the direction of Invesco CurrencyShares i.e., Invesco CurrencyShares and Putnam Focused go up and down completely randomly.
Pair Corralation between Invesco CurrencyShares and Putnam Focused
Considering the 90-day investment horizon Invesco CurrencyShares Japanese is expected to under-perform the Putnam Focused. But the etf apears to be less risky and, when comparing its historical volatility, Invesco CurrencyShares Japanese is 2.19 times less risky than Putnam Focused. The etf trades about -0.5 of its potential returns per unit of risk. The Putnam Focused Large is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 3,842 in Putnam Focused Large on October 1, 2024 and sell it today you would earn a total of 111.00 from holding Putnam Focused Large or generate 2.89% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 95.24% |
Values | Daily Returns |
Invesco CurrencyShares Japanes vs. Putnam Focused Large
Performance |
Timeline |
Invesco CurrencyShares |
Putnam Focused Large |
Invesco CurrencyShares and Putnam Focused Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Invesco CurrencyShares and Putnam Focused
The main advantage of trading using opposite Invesco CurrencyShares and Putnam Focused positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco CurrencyShares position performs unexpectedly, Putnam Focused 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 Focused will offset losses from the drop in Putnam Focused's long position.The idea behind Invesco CurrencyShares Japanese and Putnam Focused Large 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.
Putnam Focused vs. Putnam Focused Large | Putnam Focused vs. Putnam Sustainable Future | Putnam Focused vs. Putnam Sustainable Leaders | Putnam Focused vs. Sterling Capital Focus |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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