Correlation Between Mfs Value and Putnam Equity
Can any of the company-specific risk be diversified away by investing in both Mfs Value and Putnam Equity 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 Mfs Value and Putnam Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mfs Value Fund and Putnam Equity Income, you can compare the effects of market volatilities on Mfs Value and Putnam Equity 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 Mfs Value with a short position of Putnam Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Value and Putnam Equity.
Diversification Opportunities for Mfs Value and Putnam Equity
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Mfs and Putnam is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Value Fund and Putnam Equity Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Equity Me and Mfs Value 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 Mfs Value Fund are associated (or correlated) with Putnam Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Equity Me has no effect on the direction of Mfs Value i.e., Mfs Value and Putnam Equity go up and down completely randomly.
Pair Corralation between Mfs Value and Putnam Equity
Assuming the 90 days horizon Mfs Value Fund is expected to under-perform the Putnam Equity. In addition to that, Mfs Value is 1.05 times more volatile than Putnam Equity Income. It trades about -0.28 of its total potential returns per unit of risk. Putnam Equity Income is currently generating about -0.17 per unit of volatility. If you would invest 3,396 in Putnam Equity Income on January 20, 2024 and sell it today you would lose (76.00) from holding Putnam Equity Income or give up 2.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mfs Value Fund vs. Putnam Equity Income
Performance |
| Timeline |
| Mfs Value Fund |
| Putnam Equity Me |
Mfs Value and Putnam Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Value and Putnam Equity
The main advantage of trading using opposite Mfs Value and Putnam Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Value position performs unexpectedly, Putnam Equity 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 Equity will offset losses from the drop in Putnam Equity's long position.| Mfs Value vs. Mfs Prudent Investor | Mfs Value vs. Mfs Prudent Investor | Mfs Value vs. Mfs Prudent Investor | Mfs Value vs. Mfs Prudent Investor |
| Putnam Equity vs. Putnam Growth Opportunities | Putnam Equity vs. Putnam International Equity | Putnam Equity vs. George Putnam Fund | Putnam Equity vs. Putnam Multi Cap Growth |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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