Correlation Between Putnam High and Putnam Minnesota

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Putnam High and Putnam Minnesota 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 Putnam Minnesota into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Putnam High Yield and Putnam Minnesota Tax, you can compare the effects of market volatilities on Putnam High and Putnam Minnesota 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 Putnam Minnesota. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam High and Putnam Minnesota.

Diversification Opportunities for Putnam High and Putnam Minnesota

PutnamPutnamDiversified AwayPutnamPutnamDiversified Away100%
0.65
  Correlation Coefficient

Poor diversification

The 3 months correlation between Putnam and Putnam is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Putnam High Yield and Putnam Minnesota Tax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Minnesota Tax 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 Yield are associated (or correlated) with Putnam Minnesota. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Minnesota Tax has no effect on the direction of Putnam High i.e., Putnam High and Putnam Minnesota go up and down completely randomly.

Pair Corralation between Putnam High and Putnam Minnesota

Assuming the 90 days horizon Putnam High Yield is expected to under-perform the Putnam Minnesota. In addition to that, Putnam High is 1.3 times more volatile than Putnam Minnesota Tax. It trades about -0.08 of its total potential returns per unit of risk. Putnam Minnesota Tax is currently generating about -0.05 per unit of volatility. If you would invest  884.00  in Putnam Minnesota Tax on October 8, 2024 and sell it today you would lose (9.00) from holding Putnam Minnesota Tax or give up 1.02% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Putnam High Yield  vs.  Putnam Minnesota Tax

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -3.0-2.5-2.0-1.5-1.0-0.50.00.5
JavaScript chart by amCharts 3.21.15PFJAX PXMNX
       Timeline  
Putnam High Yield 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Putnam High Yield has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Putnam High is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan5.255.35.355.4
Putnam Minnesota Tax 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Putnam Minnesota Tax has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Putnam Minnesota is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan8.78.758.88.858.9

Putnam High and Putnam Minnesota Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-0.59-0.38-0.17-0.0641-0.01340.03850.08890.260.470.68 1234
JavaScript chart by amCharts 3.21.15PFJAX PXMNX
       Returns  

Pair Trading with Putnam High and Putnam Minnesota

The main advantage of trading using opposite Putnam High and Putnam Minnesota positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam High position performs unexpectedly, Putnam Minnesota 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 Minnesota will offset losses from the drop in Putnam Minnesota's long position.
The idea behind Putnam High Yield and Putnam Minnesota Tax 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.
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.

Other Complementary Tools

Top Crypto Exchanges
Search and analyze digital assets across top global cryptocurrency exchanges
Aroon Oscillator
Analyze current equity momentum using Aroon Oscillator and other momentum ratios
Bonds Directory
Find actively traded corporate debentures issued by US companies
Money Managers
Screen money managers from public funds and ETFs managed around the world
Price Exposure Probability
Analyze equity upside and downside potential for a given time horizon across multiple markets