Correlation Between Putnam Money and Columbia Select
Can any of the company-specific risk be diversified away by investing in both Putnam Money and Columbia Select 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 Money and Columbia Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Putnam Money Market and Columbia Select Large, you can compare the effects of market volatilities on Putnam Money and Columbia Select 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 Money with a short position of Columbia Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Money and Columbia Select.
Diversification Opportunities for Putnam Money and Columbia Select
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Putnam and Columbia is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Money Market and Columbia Select Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Select Large and Putnam Money 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 Money Market are associated (or correlated) with Columbia Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Select Large has no effect on the direction of Putnam Money i.e., Putnam Money and Columbia Select go up and down completely randomly.
Pair Corralation between Putnam Money and Columbia Select
Assuming the 90 days horizon Putnam Money is expected to generate 3.6 times less return on investment than Columbia Select. But when comparing it to its historical volatility, Putnam Money Market is 1.41 times less risky than Columbia Select. It trades about 0.02 of its potential returns per unit of risk. Columbia Select Large is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 789.00 in Columbia Select Large on September 25, 2024 and sell it today you would earn a total of 292.00 from holding Columbia Select Large or generate 37.01% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 95.6% |
Values | Daily Returns |
Putnam Money Market vs. Columbia Select Large
Performance |
Timeline |
Putnam Money Market |
Columbia Select Large |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
Putnam Money and Columbia Select Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Putnam Money and Columbia Select
The main advantage of trading using opposite Putnam Money and Columbia Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Money position performs unexpectedly, Columbia Select 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 Columbia Select will offset losses from the drop in Columbia Select's long position.Putnam Money vs. Cref Money Market | Putnam Money vs. Ab Government Exchange | Putnam Money vs. Money Market Obligations | Putnam Money vs. General Money Market |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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