Correlation Between Ab Select and Putnam Global
Can any of the company-specific risk be diversified away by investing in both Ab Select and Putnam Global 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 Select and Putnam Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Select Longshort and Putnam Global Incm, you can compare the effects of market volatilities on Ab Select and Putnam Global 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 Select with a short position of Putnam Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Select and Putnam Global.
Diversification Opportunities for Ab Select and Putnam Global
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ASCLX and Putnam is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Ab Select Longshort and Putnam Global Incm in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Global Incm and Ab Select 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 Select Longshort are associated (or correlated) with Putnam Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Global Incm has no effect on the direction of Ab Select i.e., Ab Select and Putnam Global go up and down completely randomly.
Pair Corralation between Ab Select and Putnam Global
Assuming the 90 days horizon Ab Select Longshort is expected to generate 1.37 times more return on investment than Putnam Global. However, Ab Select is 1.37 times more volatile than Putnam Global Incm. It trades about 0.12 of its potential returns per unit of risk. Putnam Global Incm is currently generating about 0.03 per unit of risk. If you would invest 1,088 in Ab Select Longshort on September 3, 2024 and sell it today you would earn a total of 320.00 from holding Ab Select Longshort or generate 29.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Select Longshort vs. Putnam Global Incm
Performance |
| Timeline |
| Ab Select Longshort |
| Putnam Global Incm |
Ab Select and Putnam Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Select and Putnam Global
The main advantage of trading using opposite Ab Select and Putnam Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Select position performs unexpectedly, Putnam Global 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 Global will offset losses from the drop in Putnam Global's long position.| Ab Select vs. Vanguard Financials Index | Ab Select vs. Davis Financial Fund | Ab Select vs. Icon Financial Fund | Ab Select vs. Blackrock Financial Institutions |
| Putnam Global vs. Pace High Yield | Putnam Global vs. Ab Global Risk | Putnam Global vs. Morningstar Aggressive Growth | Putnam Global vs. Ab Global Risk |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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