Correlation Between Ab Global and Putnam Ultra
Can any of the company-specific risk be diversified away by investing in both Ab Global and Putnam Ultra 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 Ab Global and Putnam Ultra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Global Real and Putnam Ultra Short, you can compare the effects of market volatilities on Ab Global and Putnam Ultra 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 Ab Global with a short position of Putnam Ultra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Global and Putnam Ultra.
Diversification Opportunities for Ab Global and Putnam Ultra
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AEEIX and Putnam is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Ab Global Real and Putnam Ultra Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Ultra Short and Ab Global 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 Ab Global Real are associated (or correlated) with Putnam Ultra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Ultra Short has no effect on the direction of Ab Global i.e., Ab Global and Putnam Ultra go up and down completely randomly.
Pair Corralation between Ab Global and Putnam Ultra
Assuming the 90 days horizon Ab Global Real is expected to generate 9.99 times more return on investment than Putnam Ultra. However, Ab Global is 9.99 times more volatile than Putnam Ultra Short. It trades about 0.04 of its potential returns per unit of risk. Putnam Ultra Short is currently generating about 0.21 per unit of risk. If you would invest 1,311 in Ab Global Real on September 4, 2024 and sell it today you would earn a total of 221.00 from holding Ab Global Real or generate 16.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Global Real vs. Putnam Ultra Short
Performance |
| Timeline |
| Ab Global Real |
| Putnam Ultra Short |
Ab Global and Putnam Ultra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Global and Putnam Ultra
The main advantage of trading using opposite Ab Global and Putnam Ultra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Global position performs unexpectedly, Putnam Ultra 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 Ultra will offset losses from the drop in Putnam Ultra's long position.| Ab Global vs. Us Government Securities | Ab Global vs. Us Government Securities | Ab Global vs. Prudential Government Income | Ab Global vs. Dunham Porategovernment Bond |
| Putnam Ultra vs. Morningstar Global Income | Putnam Ultra vs. Dreyfusstandish Global Fixed | Putnam Ultra vs. Siit Global Managed | Putnam Ultra vs. Ab Global Real |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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