Correlation Between Putnam Ultra and Nuveen Minnesota
Can any of the company-specific risk be diversified away by investing in both Putnam Ultra and Nuveen 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 Ultra and Nuveen Minnesota into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Putnam Ultra Short and Nuveen Minnesota Municipal, you can compare the effects of market volatilities on Putnam Ultra and Nuveen 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 Ultra with a short position of Nuveen Minnesota. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Ultra and Nuveen Minnesota.
Diversification Opportunities for Putnam Ultra and Nuveen Minnesota
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Putnam and Nuveen is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Ultra Short and Nuveen Minnesota Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Minnesota Mun and Putnam Ultra 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 Ultra Short are associated (or correlated) with Nuveen Minnesota. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Minnesota Mun has no effect on the direction of Putnam Ultra i.e., Putnam Ultra and Nuveen Minnesota go up and down completely randomly.
Pair Corralation between Putnam Ultra and Nuveen Minnesota
Assuming the 90 days horizon Putnam Ultra is expected to generate 1.42 times less return on investment than Nuveen Minnesota. But when comparing it to its historical volatility, Putnam Ultra Short is 2.0 times less risky than Nuveen Minnesota. It trades about 0.19 of its potential returns per unit of risk. Nuveen Minnesota Municipal is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,067 in Nuveen Minnesota Municipal on November 20, 2024 and sell it today you would earn a total of 6.00 from holding Nuveen Minnesota Municipal or generate 0.56% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Putnam Ultra Short vs. Nuveen Minnesota Municipal
Performance |
Timeline |
Putnam Ultra Short |
Nuveen Minnesota Mun |
Putnam Ultra and Nuveen Minnesota Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Putnam Ultra and Nuveen Minnesota
The main advantage of trading using opposite Putnam Ultra and Nuveen Minnesota positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Ultra position performs unexpectedly, Nuveen 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 Nuveen Minnesota will offset losses from the drop in Nuveen Minnesota's long position.Putnam Ultra vs. Vanguard Information Technology | Putnam Ultra vs. Pgim Jennison Technology | Putnam Ultra vs. Goldman Sachs Technology | Putnam Ultra vs. Columbia Global Technology |
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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