Correlation Between Dreyfus Technology and Putnam Global
Can any of the company-specific risk be diversified away by investing in both Dreyfus Technology 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 Dreyfus Technology and Putnam Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dreyfus Technology Growth and Putnam Global Technology, you can compare the effects of market volatilities on Dreyfus Technology 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 Dreyfus Technology with a short position of Putnam Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus Technology and Putnam Global.
Diversification Opportunities for Dreyfus Technology and Putnam Global
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dreyfus and Putnam is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus Technology Growth 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 Dreyfus Technology 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 Dreyfus Technology Growth 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 Dreyfus Technology i.e., Dreyfus Technology and Putnam Global go up and down completely randomly.
Pair Corralation between Dreyfus Technology and Putnam Global
Assuming the 90 days horizon Dreyfus Technology Growth is expected to generate 1.0 times more return on investment than Putnam Global. However, Dreyfus Technology is 1.0 times more volatile than Putnam Global Technology. It trades about 0.07 of its potential returns per unit of risk. Putnam Global Technology is currently generating about 0.07 per unit of risk. If you would invest 7,112 in Dreyfus Technology Growth on September 2, 2024 and sell it today you would earn a total of 954.00 from holding Dreyfus Technology Growth or generate 13.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dreyfus Technology Growth vs. Putnam Global Technology
Performance |
| Timeline |
| Dreyfus Technology Growth |
| Putnam Global Technology |
Dreyfus Technology and Putnam Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dreyfus Technology and Putnam Global
The main advantage of trading using opposite Dreyfus Technology and Putnam Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus Technology 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.| Dreyfus Technology vs. Science Technology Fund | Dreyfus Technology vs. Towpath Technology | Dreyfus Technology vs. Allianzgi Technology Fund | Dreyfus Technology vs. Technology Ultrasector Profund |
| 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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