Correlation Between Cutler Equity and Putnam Global
Can any of the company-specific risk be diversified away by investing in both Cutler Equity 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 Cutler Equity and Putnam Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cutler Equity and Putnam Global Technology, you can compare the effects of market volatilities on Cutler Equity 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 Cutler Equity with a short position of Putnam Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cutler Equity and Putnam Global.
Diversification Opportunities for Cutler Equity and Putnam Global
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cutler and Putnam is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Cutler Equity 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 Cutler Equity 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 Cutler Equity 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 Cutler Equity i.e., Cutler Equity and Putnam Global go up and down completely randomly.
Pair Corralation between Cutler Equity and Putnam Global
Assuming the 90 days horizon Cutler Equity is expected to generate 2.7 times less return on investment than Putnam Global. But when comparing it to its historical volatility, Cutler Equity is 1.76 times less risky than Putnam Global. It trades about 0.07 of its potential returns per unit of risk. Putnam Global Technology is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 4,220 in Putnam Global Technology on September 3, 2024 and sell it today you would earn a total of 3,711 from holding Putnam Global Technology or generate 87.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cutler Equity vs. Putnam Global Technology
Performance |
| Timeline |
| Cutler Equity |
| Putnam Global Technology |
Cutler Equity and Putnam Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cutler Equity and Putnam Global
The main advantage of trading using opposite Cutler Equity and Putnam Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cutler Equity 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.| Cutler Equity vs. Advent Claymore Convertible | Cutler Equity vs. Gabelli Convertible And | Cutler Equity vs. Fidelity Sai Convertible | Cutler Equity vs. Calamos Dynamic Convertible |
| Putnam Global vs. Nationwide Global Equity | Putnam Global vs. Balanced Fund Retail | Putnam Global vs. Cutler Equity | Putnam Global vs. Small Cap Equity |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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