Correlation Between Crossmark Steward and Putnman Retirement

Can any of the company-specific risk be diversified away by investing in both Crossmark Steward and Putnman Retirement 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 Crossmark Steward and Putnman Retirement into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Crossmark Steward Equity and Putnman Retirement Ready, you can compare the effects of market volatilities on Crossmark Steward and Putnman Retirement 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 Crossmark Steward with a short position of Putnman Retirement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crossmark Steward and Putnman Retirement.

Diversification Opportunities for Crossmark Steward and Putnman Retirement

-0.38

Correlation Coefficient

Crossmark Steward  Putnman Retirement

Very good diversification

The 3 months correlation between Crossmark and Putnman is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Crossmark Steward Equity and Putnman Retirement Ready in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnman Retirement Ready and Crossmark Steward 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 Crossmark Steward Equity are associated (or correlated) with Putnman Retirement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnman Retirement Ready has no effect on the direction of Crossmark Steward i.e., Crossmark Steward and Putnman Retirement go up and down completely randomly.

Pair Corralation between Crossmark Steward and Putnman Retirement

Assuming the 90 days horizon Crossmark Steward Equity is expected to under-perform the Putnman Retirement. In addition to that, Crossmark Steward is 1.4 times more volatile than Putnman Retirement Ready. It trades about -0.12 of its total potential returns per unit of risk. Putnman Retirement Ready is currently generating about 0.03 per unit of volatility. If you would invest  2,607  in Putnman Retirement Ready on September 15, 2024 and sell it today you would earn a total of  14.00  from holding Putnman Retirement Ready or generate 0.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Crossmark Steward Equity  vs.  Putnman Retirement Ready

Crossmark Steward Equity

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Crossmark Steward Equity has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Crossmark Steward is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Putnman Retirement Ready

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Putnman Retirement Ready are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Putnman Retirement is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Crossmark Steward and Putnman Retirement

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

The idea behind Crossmark Steward Equity and Putnman Retirement Ready 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.