Correlation Between Putnam High and Veea

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

Diversification Opportunities for Putnam High and Veea

-0.28

Correlation Coefficient

Putnam High  Veea

Very good diversification

The 3 months correlation between Putnam and Veea is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Putnam High Yield and Veea Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Veea Inc 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 Veea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Veea Inc has no effect on the direction of Putnam High i.e., Putnam High and Veea go up and down completely randomly.

Pair Corralation between Putnam High and Veea

Assuming the 90 days horizon Putnam High Yield is expected to generate 0.01 times more return on investment than Veea. However, Putnam High Yield is 113.24 times less risky than Veea. It trades about 0.19 of its potential returns per unit of risk. Veea Inc is currently generating about -0.01 per unit of risk. If you would invest  517.00  in Putnam High Yield on September 22, 2024 and sell it today you would earn a total of  21.00  from holding Putnam High Yield or generate 4.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	56.69%
Values	Daily Returns

Putnam High Yield  vs.  Veea Inc

Putnam High Yield

Risk-Adjusted Performance

0 of 100

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.

Veea Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Veea Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Putnam High and Veea

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

The idea behind Putnam High Yield and Veea Inc 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.