Correlation Between Ab Global and Putnam Multi
Can any of the company-specific risk be diversified away by investing in both Ab Global and Putnam Multi 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 Multi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Global Risk and Putnam Multi Cap Growth, you can compare the effects of market volatilities on Ab Global and Putnam Multi 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 Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Global and Putnam Multi.
Diversification Opportunities for Ab Global and Putnam Multi
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between CABIX and Putnam is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Ab Global Risk and Putnam Multi Cap Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Multi Cap 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 Risk are associated (or correlated) with Putnam Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Multi Cap has no effect on the direction of Ab Global i.e., Ab Global and Putnam Multi go up and down completely randomly.
Pair Corralation between Ab Global and Putnam Multi
Assuming the 90 days horizon Ab Global is expected to generate 1.37 times less return on investment than Putnam Multi. But when comparing it to its historical volatility, Ab Global Risk is 1.69 times less risky than Putnam Multi. It trades about 0.17 of its potential returns per unit of risk. Putnam Multi Cap Growth is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 12,238 in Putnam Multi Cap Growth on October 20, 2024 and sell it today you would earn a total of 298.00 from holding Putnam Multi Cap Growth or generate 2.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Global Risk vs. Putnam Multi Cap Growth
Performance |
| Timeline |
| Ab Global Risk |
| Putnam Multi Cap |
Ab Global and Putnam Multi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Global and Putnam Multi
The main advantage of trading using opposite Ab Global and Putnam Multi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Global position performs unexpectedly, Putnam Multi 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 Multi will offset losses from the drop in Putnam Multi's long position.| Ab Global vs. Live Oak Health | Ab Global vs. Alger Health Sciences | Ab Global vs. Tekla Healthcare Investors | Ab Global vs. Deutsche Health And |
| Putnam Multi vs. 1919 Financial Services | Putnam Multi vs. Fidelity Advisor Financial | Putnam Multi vs. Blackrock Financial Institutions | Putnam Multi vs. Gabelli Global Financial |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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