Correlation Between Putnam Retirement and Rivernorthoaktree

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

By analyzing existing cross correlation between Putnam Retirement Advantage and Rivernorthoaktree High Income, you can compare the effects of market volatilities on Putnam Retirement and Rivernorthoaktree 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 Rivernorthoaktree. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Retirement and Rivernorthoaktree.

Diversification Opportunities for Putnam Retirement and Rivernorthoaktree

0.17

Correlation Coefficient

Putnam Retirement  Rivernorthoaktree

Average diversification

The 3 months correlation between Putnam and Rivernorthoaktree is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Retirement Advantage and Rivernorthoaktree High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rivernorthoaktree High 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 Advantage are associated (or correlated) with Rivernorthoaktree. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rivernorthoaktree High has no effect on the direction of Putnam Retirement i.e., Putnam Retirement and Rivernorthoaktree go up and down completely randomly.

Pair Corralation between Putnam Retirement and Rivernorthoaktree

Assuming the 90 days horizon Putnam Retirement Advantage is expected to under-perform the Rivernorthoaktree. In addition to that, Putnam Retirement is 6.32 times more volatile than Rivernorthoaktree High Income. It trades about -0.05 of its total potential returns per unit of risk. Rivernorthoaktree High Income is currently generating about 0.15 per unit of volatility. If you would invest  868.00  in Rivernorthoaktree High Income on December 25, 2024 and sell it today you would earn a total of  11.00  from holding Rivernorthoaktree High Income or generate 1.27% return on investment over 90 days.

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

Putnam Retirement Advantage  vs.  Rivernorthoaktree High Income

Putnam Retirement

Risk-Adjusted Performance

Very Weak

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

Rivernorthoaktree High

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Rivernorthoaktree High Income are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Rivernorthoaktree is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Putnam Retirement and Rivernorthoaktree

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

The idea behind Putnam Retirement Advantage and Rivernorthoaktree High Income 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.