Correlation Between Goldman Sachs and Putnam International
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs 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 Goldman Sachs and Putnam International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs International and Putnam International Capital, you can compare the effects of market volatilities on Goldman Sachs 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 Goldman Sachs with a short position of Putnam International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Putnam International.
Diversification Opportunities for Goldman Sachs and Putnam International
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Goldman and Putnam is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs International and Putnam International Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam International and Goldman Sachs 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 Goldman Sachs International 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 Goldman Sachs i.e., Goldman Sachs and Putnam International go up and down completely randomly.
Pair Corralation between Goldman Sachs and Putnam International
Assuming the 90 days horizon Goldman Sachs International is expected to generate 1.04 times more return on investment than Putnam International. However, Goldman Sachs is 1.04 times more volatile than Putnam International Capital. It trades about 0.05 of its potential returns per unit of risk. Putnam International Capital is currently generating about 0.05 per unit of risk. If you would invest 1,071 in Goldman Sachs International on September 3, 2024 and sell it today you would earn a total of 227.00 from holding Goldman Sachs International or generate 21.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs International vs. Putnam International Capital
Performance |
| Timeline |
| Goldman Sachs Intern |
| Putnam International |
Goldman Sachs and Putnam International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Putnam International
The main advantage of trading using opposite Goldman Sachs and Putnam International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs 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.| Goldman Sachs vs. Maryland Short Term Tax Free | Goldman Sachs vs. Old Westbury Short Term | Goldman Sachs vs. Aqr Long Short Equity | Goldman Sachs vs. Touchstone Ultra Short |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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