Correlation Between Putnam High and Channing Intrinsic

Can any of the company-specific risk be diversified away by investing in both Putnam High and Channing Intrinsic 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 Channing Intrinsic 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 Channing Intrinsic Value, you can compare the effects of market volatilities on Putnam High and Channing Intrinsic 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 Channing Intrinsic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam High and Channing Intrinsic.

Diversification Opportunities for Putnam High and Channing Intrinsic

-0.34

Correlation Coefficient

Putnam High  Channing Intrinsic

Very good diversification

The 3 months correlation between Putnam and Channing is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Putnam High Income and Channing Intrinsic Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Channing Intrinsic Value 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 Channing Intrinsic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Channing Intrinsic Value has no effect on the direction of Putnam High i.e., Putnam High and Channing Intrinsic go up and down completely randomly.

Pair Corralation between Putnam High and Channing Intrinsic

Considering the 90-day investment horizon Putnam High Income is expected to generate 0.51 times more return on investment than Channing Intrinsic. However, Putnam High Income is 1.97 times less risky than Channing Intrinsic. It trades about 0.18 of its potential returns per unit of risk. Channing Intrinsic Value is currently generating about -0.12 per unit of risk. If you would invest  626.00  in Putnam High Income on December 21, 2024 and sell it today you would earn a total of  43.00  from holding Putnam High Income or generate 6.87% 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.  Channing Intrinsic Value

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 14 (%) of all funds and portfolios of funds over the last 90 days. Despite nearly weak fundamental indicators, Putnam High may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Channing Intrinsic Value

Risk-Adjusted Performance

Very Weak

Over the last 90 days Channing Intrinsic Value has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's essential indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Putnam High and Channing Intrinsic

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

The idea behind Putnam High Income and Channing Intrinsic Value 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.