Correlation Between Putnam High and Cibc Atlas

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

By analyzing existing cross correlation between Putnam High Income and Cibc Atlas All, you can compare the effects of market volatilities on Putnam High and Cibc Atlas 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 High with a short position of Cibc Atlas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam High and Cibc Atlas.

Diversification Opportunities for Putnam High and Cibc Atlas

-0.15

Correlation Coefficient

Putnam High  Cibc Atlas

Good diversification

The 3 months correlation between Putnam and Cibc is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Putnam High Income and Cibc Atlas All in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cibc Atlas All and Putnam High 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 High Income are associated (or correlated) with Cibc Atlas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cibc Atlas All has no effect on the direction of Putnam High i.e., Putnam High and Cibc Atlas go up and down completely randomly.

Pair Corralation between Putnam High and Cibc Atlas

Considering the 90-day investment horizon Putnam High Income is expected to generate 0.44 times more return on investment than Cibc Atlas. However, Putnam High Income is 2.27 times less risky than Cibc Atlas. It trades about 0.15 of its potential returns per unit of risk. Cibc Atlas All is currently generating about -0.07 per unit of risk. If you would invest  629.00  in Putnam High Income on December 27, 2024 and sell it today you would earn a total of  35.00  from holding Putnam High Income or generate 5.56% return on investment over 90 days.

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

Putnam High Income  vs.  Cibc Atlas All

Putnam High Income

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Putnam High Income are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. Despite nearly stable fundamental indicators, Putnam High is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Cibc Atlas All

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cibc Atlas All has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Cibc Atlas 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 High and Cibc Atlas

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

The idea behind Putnam High Income and Cibc Atlas All 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.