Correlation Between Franklin High and Putnam Global
Can any of the company-specific risk be diversified away by investing in both Franklin High 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 Franklin High and Putnam Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin High Yield and Putnam Global Technology, you can compare the effects of market volatilities on Franklin High 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 Franklin High with a short position of Putnam Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin High and Putnam Global.
Diversification Opportunities for Franklin High and Putnam Global
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Franklin and Putnam is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Franklin High Yield 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 Franklin High 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 Franklin 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 Technology has no effect on the direction of Franklin High i.e., Franklin High and Putnam Global go up and down completely randomly.
Pair Corralation between Franklin High and Putnam Global
Assuming the 90 days horizon Franklin High is expected to generate 4.32 times less return on investment than Putnam Global. But when comparing it to its historical volatility, Franklin High Yield is 2.79 times less risky than Putnam Global. It trades about 0.17 of its potential returns per unit of risk. Putnam Global Technology is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 6,906 in Putnam Global Technology on September 5, 2024 and sell it today you would earn a total of 400.00 from holding Putnam Global Technology or generate 5.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin High Yield vs. Putnam Global Technology
Performance |
| Timeline |
| Franklin High Yield |
| Putnam Global Technology |
Franklin High and Putnam Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin High and Putnam Global
The main advantage of trading using opposite Franklin High and Putnam Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin High 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.| Franklin High vs. Virtus High Yield | Franklin High vs. Artisan High Income | Franklin High vs. Calvert High Yield | Franklin High vs. Gmo High Yield |
| 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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