Correlation Between Putnam Multi-Asset and Dupont Denemours

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Can any of the company-specific risk be diversified away by investing in both Putnam Multi-Asset and Dupont Denemours 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 Multi-Asset and Dupont Denemours into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Putnam Multi-Asset Absolute and Dupont Denemours, you can compare the effects of market volatilities on Putnam Multi-Asset and Dupont Denemours 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 Multi-Asset with a short position of Dupont Denemours. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Multi-Asset and Dupont Denemours.

Diversification Opportunities for Putnam Multi-Asset and Dupont Denemours

0.89
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Putnam and Dupont is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Multi-Asset Absolute and Dupont Denemours in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dupont Denemours and Putnam Multi-Asset 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 Multi-Asset Absolute are associated (or correlated) with Dupont Denemours. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dupont Denemours has no effect on the direction of Putnam Multi-Asset i.e., Putnam Multi-Asset and Dupont Denemours go up and down completely randomly.

Pair Corralation between Putnam Multi-Asset and Dupont Denemours

Assuming the 90 days horizon Putnam Multi-Asset is expected to generate 85.69 times less return on investment than Dupont Denemours. But when comparing it to its historical volatility, Putnam Multi-Asset Absolute is 8.07 times less risky than Dupont Denemours. It trades about 0.02 of its potential returns per unit of risk. Dupont Denemours is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  5,459  in Dupont Denemours on May 11, 2022 and sell it today you would earn a total of  474.00  from holding Dupont Denemours or generate 8.68% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Putnam Multi-Asset Absolute  vs.  Dupont Denemours

 Performance (%) 
       Timeline  
Putnam Multi-Asset 
Putnam Performance
0 of 100
Over the last 90 days Putnam Multi-Asset Absolute has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Putnam Multi-Asset is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Putnam Price Channel

Dupont Denemours 
Dupont Performance
0 of 100
Over the last 90 days Dupont Denemours has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Dupont Denemours is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Dupont Price Channel

Putnam Multi-Asset and Dupont Denemours Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Putnam Multi-Asset and Dupont Denemours

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

Putnam Multi-Asset Absolute

Pair trading matchups for Putnam Multi-Asset

The idea behind Putnam Multi-Asset Absolute and Dupont Denemours 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.
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.

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