Correlation Between Putnam Short and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Putnam Short and Lord Abbett 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 Lord Abbett 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 Lord Abbett Ultra, you can compare the effects of market volatilities on Putnam Short and Lord Abbett 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 Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Short and Lord Abbett.
Diversification Opportunities for Putnam Short and Lord Abbett
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Putnam and Lord is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Short Duration and Lord Abbett Ultra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Ultra 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 Lord Abbett. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lord Abbett Ultra has no effect on the direction of Putnam Short i.e., Putnam Short and Lord Abbett go up and down completely randomly.
Pair Corralation between Putnam Short and Lord Abbett
Assuming the 90 days horizon Putnam Short is expected to generate 1.35 times less return on investment than Lord Abbett. In addition to that, Putnam Short is 1.11 times more volatile than Lord Abbett Ultra. It trades about 0.16 of its total potential returns per unit of risk. Lord Abbett Ultra is currently generating about 0.24 per unit of volatility. If you would invest 993.00 in Lord Abbett Ultra on January 16, 2024 and sell it today you would earn a total of 4.00 from holding Lord Abbett Ultra or generate 0.4% 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. Lord Abbett Ultra
Performance |
| Timeline |
| Putnam Short Duration |
| Lord Abbett Ultra |
Putnam Short and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Short and Lord Abbett
The main advantage of trading using opposite Putnam Short and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Short position performs unexpectedly, Lord Abbett 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 Lord Abbett will offset losses from the drop in Lord Abbett's long position.| Putnam Short vs. Putnam Tax Exempt | Putnam Short vs. Putnam Floating Rate | Putnam Short vs. Putnam High Yield | Putnam Short vs. Putnam Floating Rate |
| Lord Abbett vs. Lord Abbett Short | Lord Abbett vs. Lord Abbett Growth | Lord Abbett vs. Putnam Short Duration | Lord Abbett vs. Floating Rate Fund |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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