Correlation Between Pimco Diversified and Putnam Diversified

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

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

Diversification Opportunities for Pimco Diversified and Putnam Diversified

0.0

Correlation Coefficient

Pimco Diversified  Putnam Diversified

Pay attention - limited upside

The 3 months correlation between Pimco and Putnam is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Diversified Income and Putnam Diversified Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Diversified Income and Pimco Diversified 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 Pimco Diversified Income are associated (or correlated) with Putnam Diversified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Diversified Income has no effect on the direction of Pimco Diversified i.e., Pimco Diversified and Putnam Diversified go up and down completely randomly.

Pair Corralation between Pimco Diversified and Putnam Diversified

If you would invest  952.00  in Pimco Diversified Income on December 20, 2024 and sell it today you would earn a total of  23.00  from holding Pimco Diversified Income or generate 2.42% return on investment over 90 days.

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

Pimco Diversified Income  vs.  Putnam Diversified Income

Pimco Diversified Income

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Pimco Diversified Income are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Pimco Diversified is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Putnam Diversified Income

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Pimco Diversified and Putnam Diversified

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

The idea behind Pimco Diversified Income and Putnam Diversified 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 Transaction History module to view history of all your transactions and understand their impact on performance.