Correlation Between Tax-exempt Fund and Putnam California

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

By analyzing existing cross correlation between Tax Exempt Fund Of and Putnam California Tax, you can compare the effects of market volatilities on Tax-exempt Fund and Putnam California 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 Tax-exempt Fund with a short position of Putnam California. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tax-exempt Fund and Putnam California.

Diversification Opportunities for Tax-exempt Fund and Putnam California

0.0

Correlation Coefficient

Tax-exempt Fund  Putnam California

Pay attention - limited upside

The 3 months correlation between Tax-exempt and Putnam is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Tax Exempt Fund Of and Putnam California Tax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam California Tax and Tax-exempt Fund 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 Tax Exempt Fund Of are associated (or correlated) with Putnam California. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam California Tax has no effect on the direction of Tax-exempt Fund i.e., Tax-exempt Fund and Putnam California go up and down completely randomly.

Pair Corralation between Tax-exempt Fund and Putnam California

If you would invest  1,652  in Tax Exempt Fund Of on February 5, 2024 and sell it today you would earn a total of  3.00  from holding Tax Exempt Fund Of or generate 0.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	4.55%
Values	Daily Returns

Tax Exempt Fund Of  vs.  Putnam California Tax

Tax Exempt Fund

Risk-Adjusted Performance

0 of 100

Very Weak

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

Putnam California Tax

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Tax-exempt Fund and Putnam California

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

The idea behind Tax Exempt Fund Of and Putnam California Tax 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.