Correlation Between Gabelli Global and Putnam Equity
Can any of the company-specific risk be diversified away by investing in both Gabelli Global and Putnam Equity 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 Gabelli Global and Putnam Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gabelli Global Financial and Putnam Equity Income, you can compare the effects of market volatilities on Gabelli Global and Putnam Equity 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 Gabelli Global with a short position of Putnam Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gabelli Global and Putnam Equity.
Diversification Opportunities for Gabelli Global and Putnam Equity
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Gabelli and Putnam is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Gabelli Global Financial and Putnam Equity Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Equity Income and Gabelli Global 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 Gabelli Global Financial are associated (or correlated) with Putnam Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Equity Income has no effect on the direction of Gabelli Global i.e., Gabelli Global and Putnam Equity go up and down completely randomly.
Pair Corralation between Gabelli Global and Putnam Equity
Assuming the 90 days horizon Gabelli Global Financial is expected to generate 1.42 times more return on investment than Putnam Equity. However, Gabelli Global is 1.42 times more volatile than Putnam Equity Income. It trades about 0.14 of its potential returns per unit of risk. Putnam Equity Income is currently generating about 0.17 per unit of risk. If you would invest 1,200 in Gabelli Global Financial on September 5, 2024 and sell it today you would earn a total of 428.00 from holding Gabelli Global Financial or generate 35.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gabelli Global Financial vs. Putnam Equity Income
Performance |
| Timeline |
| Gabelli Global Financial |
| Putnam Equity Income |
Gabelli Global and Putnam Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gabelli Global and Putnam Equity
The main advantage of trading using opposite Gabelli Global and Putnam Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gabelli Global position performs unexpectedly, Putnam Equity 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 Equity will offset losses from the drop in Putnam Equity's long position.| Gabelli Global vs. Baillie Gifford Health | Gabelli Global vs. Tekla Healthcare Opportunities | Gabelli Global vs. Health Biotchnology Portfolio | Gabelli Global vs. Eventide Healthcare Life |
| Putnam Equity vs. Absolute Convertible Arbitrage | Putnam Equity vs. Fidelity Sai Convertible | Putnam Equity vs. Virtus Convertible | Putnam Equity vs. Rationalpier 88 Convertible |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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