Correlation Between Tiaa-cref Inflation and Putnam Floating

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

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

Diversification Opportunities for Tiaa-cref Inflation and Putnam Floating

-0.3

Correlation Coefficient

Tiaa-cref Inflation  Putnam Floating

Very good diversification

The 3 months correlation between Tiaa-cref and Putnam is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Tiaa Cref Inflation Link and Putnam Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Floating Rate and Tiaa-cref Inflation 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 Tiaa Cref Inflation Link are associated (or correlated) with Putnam Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Floating Rate has no effect on the direction of Tiaa-cref Inflation i.e., Tiaa-cref Inflation and Putnam Floating go up and down completely randomly.

Pair Corralation between Tiaa-cref Inflation and Putnam Floating

Assuming the 90 days horizon Tiaa-cref Inflation is expected to generate 1.88 times less return on investment than Putnam Floating. In addition to that, Tiaa-cref Inflation is 1.5 times more volatile than Putnam Floating Rate. It trades about 0.07 of its total potential returns per unit of risk. Putnam Floating Rate is currently generating about 0.19 per unit of volatility. If you would invest  723.00  in Putnam Floating Rate on October 4, 2024 and sell it today you would earn a total of  77.00  from holding Putnam Floating Rate or generate 10.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.7%
Values	Daily Returns

Tiaa Cref Inflation Link  vs.  Putnam Floating Rate

Tiaa Cref Inflation

Risk-Adjusted Performance

0 of 100

Very Weak

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

Putnam Floating Rate

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Putnam Floating Rate are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Putnam 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 Tiaa-cref Inflation and Putnam Floating

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

The idea behind Tiaa Cref Inflation Link and Putnam 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.

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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.