Correlation Between Citigroup and Putnam Global
Can any of the company-specific risk be diversified away by investing in both Citigroup 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 Citigroup and Putnam Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Putnam Global Technology, you can compare the effects of market volatilities on Citigroup 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 Citigroup with a short position of Putnam Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Putnam Global.
Diversification Opportunities for Citigroup and Putnam Global
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and Putnam is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Putnam Global Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Global Technology and Citigroup 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 Citigroup 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 Technology has no effect on the direction of Citigroup i.e., Citigroup and Putnam Global go up and down completely randomly.
Pair Corralation between Citigroup and Putnam Global
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.16 times less return on investment than Putnam Global. In addition to that, Citigroup is 1.32 times more volatile than Putnam Global Technology. It trades about 0.07 of its total potential returns per unit of risk. Putnam Global Technology is currently generating about 0.11 per unit of volatility. If you would invest 4,178 in Putnam Global Technology on September 2, 2024 and sell it today you would earn a total of 3,753 from holding Putnam Global Technology or generate 89.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Putnam Global Technology
Performance |
| Timeline |
| Citigroup |
| Putnam Global Technology |
Citigroup and Putnam Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Putnam Global
The main advantage of trading using opposite Citigroup and Putnam Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup 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.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Putnam Global vs. Blackrock Science Technology | Putnam Global vs. Columbia Global Technology | Putnam Global vs. Putnam Growth Opportunities | Putnam Global vs. Morgan Stanley Multi |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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