Correlation Between Balanced Fund and Putnam Global
Can any of the company-specific risk be diversified away by investing in both Balanced Fund 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 Balanced Fund and Putnam Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Balanced Fund Retail and Putnam Global Technology, you can compare the effects of market volatilities on Balanced Fund 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 Balanced Fund with a short position of Putnam Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Balanced Fund and Putnam Global.
Diversification Opportunities for Balanced Fund and Putnam Global
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Balanced and Putnam is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Balanced Fund Retail 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 Balanced Fund 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 Balanced Fund Retail 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 Balanced Fund i.e., Balanced Fund and Putnam Global go up and down completely randomly.
Pair Corralation between Balanced Fund and Putnam Global
Assuming the 90 days horizon Balanced Fund is expected to generate 2.76 times less return on investment than Putnam Global. But when comparing it to its historical volatility, Balanced Fund Retail is 2.3 times less risky than Putnam Global. It trades about 0.09 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 4,200 in Putnam Global Technology on September 4, 2024 and sell it today you would earn a total of 3,798 from holding Putnam Global Technology or generate 90.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Balanced Fund Retail vs. Putnam Global Technology
Performance |
| Timeline |
| Balanced Fund Retail |
| Putnam Global Technology |
Balanced Fund and Putnam Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Balanced Fund and Putnam Global
The main advantage of trading using opposite Balanced Fund and Putnam Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Balanced Fund 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.| Balanced Fund vs. Muirfield Fund Retail | Balanced Fund vs. Dynamic Growth Fund | Balanced Fund vs. Infrastructure Fund Retail | Balanced Fund vs. Quantex Fund Retail |
| Putnam Global vs. L Abbett Growth | Putnam Global vs. Qs Growth Fund | Putnam Global vs. Pace Smallmedium Growth | Putnam Global vs. Champlain Mid Cap |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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