Correlation Between Goldman Sachs and Putnam Global
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs 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 Goldman Sachs and Putnam Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs Technology and Putnam Global Technology, you can compare the effects of market volatilities on Goldman Sachs 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 Goldman Sachs with a short position of Putnam Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Putnam Global.
Diversification Opportunities for Goldman Sachs and Putnam Global
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Goldman and Putnam is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Technology 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 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 Technology 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 Goldman Sachs i.e., Goldman Sachs and Putnam Global go up and down completely randomly.
Pair Corralation between Goldman Sachs and Putnam Global
Assuming the 90 days horizon Goldman Sachs Technology is expected to generate 1.04 times more return on investment than Putnam Global. However, Goldman Sachs is 1.04 times more volatile than Putnam Global Technology. It trades about 0.14 of its potential returns per unit of risk. Putnam Global Technology is currently generating about 0.01 per unit of risk. If you would invest 3,427 in Goldman Sachs Technology on August 31, 2024 and sell it today you would earn a total of 124.00 from holding Goldman Sachs Technology or generate 3.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs Technology vs. Putnam Global Technology
Performance |
| Timeline |
| Goldman Sachs Technology |
| Putnam Global Technology |
Goldman Sachs and Putnam Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Putnam Global
The main advantage of trading using opposite Goldman Sachs and Putnam Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs 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.| Goldman Sachs vs. Aqr Long Short Equity | Goldman Sachs vs. Chartwell Short Duration | Goldman Sachs vs. Jhancock Short Duration | Goldman Sachs vs. Astor Longshort Fund |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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