Correlation Between Barings Us and Putnam Global
Can any of the company-specific risk be diversified away by investing in both Barings Us 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 Barings Us and Putnam Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barings High Yield and Putnam Global Financials, you can compare the effects of market volatilities on Barings Us 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 Barings Us with a short position of Putnam Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Us and Putnam Global.
Diversification Opportunities for Barings Us and Putnam Global
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Barings and Putnam is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Barings High Yield and Putnam Global Financials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Global Financials and Barings Us 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 High Yield 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 Financials has no effect on the direction of Barings Us i.e., Barings Us and Putnam Global go up and down completely randomly.
Pair Corralation between Barings Us and Putnam Global
Assuming the 90 days horizon Barings High Yield is expected to generate 0.26 times more return on investment than Putnam Global. However, Barings High Yield is 3.78 times less risky than Putnam Global. It trades about -0.35 of its potential returns per unit of risk. Putnam Global Financials is currently generating about -0.32 per unit of risk. If you would invest 818.00 in Barings High Yield on October 16, 2024 and sell it today you would lose (9.00) from holding Barings High Yield or give up 1.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings High Yield vs. Putnam Global Financials
Performance |
| Timeline |
| Barings High Yield |
| Putnam Global Financials |
Barings Us and Putnam Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Us and Putnam Global
The main advantage of trading using opposite Barings Us and Putnam Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Us 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.| Barings Us vs. Cref Money Market | Barings Us vs. Hsbc Treasury Money | Barings Us vs. Schwab Government Money | Barings Us vs. Principal Fds Money |
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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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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