Correlation Between Barings Global and Putnam Dynamic
Can any of the company-specific risk be diversified away by investing in both Barings Global and Putnam Dynamic 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 Barings Global and Putnam Dynamic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barings Global Floating and Putnam Dynamic Asset, you can compare the effects of market volatilities on Barings Global and Putnam Dynamic 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 Barings Global with a short position of Putnam Dynamic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Global and Putnam Dynamic.
Diversification Opportunities for Barings Global and Putnam Dynamic
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Barings and Putnam is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Barings Global Floating and Putnam Dynamic Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Dynamic Asset and Barings 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 Barings Global Floating are associated (or correlated) with Putnam Dynamic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Dynamic Asset has no effect on the direction of Barings Global i.e., Barings Global and Putnam Dynamic go up and down completely randomly.
Pair Corralation between Barings Global and Putnam Dynamic
Assuming the 90 days horizon Barings Global Floating is expected to generate 0.14 times more return on investment than Putnam Dynamic. However, Barings Global Floating is 7.23 times less risky than Putnam Dynamic. It trades about -0.25 of its potential returns per unit of risk. Putnam Dynamic Asset is currently generating about -0.16 per unit of risk. If you would invest 875.00 in Barings Global Floating on December 9, 2024 and sell it today you would lose (4.00) from holding Barings Global Floating or give up 0.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Global Floating vs. Putnam Dynamic Asset
Performance |
| Timeline |
| Barings Global Floating |
| Putnam Dynamic Asset |
Barings Global and Putnam Dynamic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Global and Putnam Dynamic
The main advantage of trading using opposite Barings Global and Putnam Dynamic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Global position performs unexpectedly, Putnam Dynamic 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 Dynamic will offset losses from the drop in Putnam Dynamic's long position.| Barings Global vs. Tax Managed Large Cap | ||
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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