Correlation Between Putnam Short and Shenkman Floating

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

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

Diversification Opportunities for Putnam Short and Shenkman Floating

0.91

Correlation Coefficient

Putnam Short  Shenkman Floating

Almost no diversification

The 3 months correlation between Putnam and Shenkman is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Short Duration and Shenkman Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenkman Floating Rate and Putnam Short 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 Short Duration are associated (or correlated) with Shenkman Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenkman Floating Rate has no effect on the direction of Putnam Short i.e., Putnam Short and Shenkman Floating go up and down completely randomly.

Pair Corralation between Putnam Short and Shenkman Floating

Assuming the 90 days horizon Putnam Short is expected to generate 1.3 times less return on investment than Shenkman Floating. In addition to that, Putnam Short is 1.19 times more volatile than Shenkman Floating Rate. It trades about 0.21 of its total potential returns per unit of risk. Shenkman Floating Rate is currently generating about 0.33 per unit of volatility. If you would invest  854.00  in Shenkman Floating Rate on December 4, 2024 and sell it today you would earn a total of  58.00  from holding Shenkman Floating Rate or generate 6.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Putnam Short Duration  vs.  Shenkman Floating Rate

Putnam Short Duration

Risk-Adjusted Performance

Good

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

Shenkman Floating Rate

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Shenkman Floating Rate are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Shenkman Floating is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Putnam Short and Shenkman Floating

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

The idea behind Putnam Short Duration and Shenkman Floating Rate 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.