Correlation Between Franklin Natural and Putnam International
Can any of the company-specific risk be diversified away by investing in both Franklin Natural and Putnam International 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 Natural and Putnam International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Natural Resources and Putnam International Equity, you can compare the effects of market volatilities on Franklin Natural and Putnam International 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 Natural with a short position of Putnam International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Natural and Putnam International.
Diversification Opportunities for Franklin Natural and Putnam International
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Franklin and Putnam is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Natural Resources and Putnam International Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam International and Franklin Natural 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 Natural Resources are associated (or correlated) with Putnam International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam International has no effect on the direction of Franklin Natural i.e., Franklin Natural and Putnam International go up and down completely randomly.
Pair Corralation between Franklin Natural and Putnam International
Assuming the 90 days horizon Franklin Natural Resources is expected to under-perform the Putnam International. In addition to that, Franklin Natural is 1.32 times more volatile than Putnam International Equity. It trades about -0.1 of its total potential returns per unit of risk. Putnam International Equity is currently generating about 0.17 per unit of volatility. If you would invest 2,707 in Putnam International Equity on September 13, 2024 and sell it today you would earn a total of 61.00 from holding Putnam International Equity or generate 2.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Natural Resources vs. Putnam International Equity
Performance |
| Timeline |
| Franklin Natural Res |
| Putnam International |
Franklin Natural and Putnam International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Natural and Putnam International
The main advantage of trading using opposite Franklin Natural and Putnam International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Natural position performs unexpectedly, Putnam International 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 International will offset losses from the drop in Putnam International's long position.| Franklin Natural vs. Vanguard Financials Index | Franklin Natural vs. Prudential Jennison Financial | Franklin Natural vs. John Hancock Financial | Franklin Natural vs. Mesirow Financial Small |
| Putnam International vs. SCOR PK | Putnam International vs. Morningstar Unconstrained Allocation | Putnam International vs. Via Renewables | Putnam International vs. Bondbloxx ETF Trust |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |