Correlation Between James Balanced and Putnam Global
Can any of the company-specific risk be diversified away by investing in both James Balanced 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 James Balanced and Putnam Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between James Balanced Golden and Putnam Global Industrials, you can compare the effects of market volatilities on James Balanced 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 James Balanced with a short position of Putnam Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of James Balanced and Putnam Global.
Diversification Opportunities for James Balanced and Putnam Global
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between James and Putnam is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding James Balanced Golden and Putnam Global Industrials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Global Industrials and James Balanced 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 James Balanced Golden 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 Industrials has no effect on the direction of James Balanced i.e., James Balanced and Putnam Global go up and down completely randomly.
Pair Corralation between James Balanced and Putnam Global
Assuming the 90 days horizon James Balanced is expected to generate 1.72 times less return on investment than Putnam Global. But when comparing it to its historical volatility, James Balanced Golden is 1.87 times less risky than Putnam Global. It trades about 0.09 of its potential returns per unit of risk. Putnam Global Industrials is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 3,609 in Putnam Global Industrials on August 28, 2024 and sell it today you would earn a total of 53.00 from holding Putnam Global Industrials or generate 1.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
James Balanced Golden vs. Putnam Global Industrials
Performance |
| Timeline |
| James Balanced Golden |
| Putnam Global Industrials |
James Balanced and Putnam Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with James Balanced and Putnam Global
The main advantage of trading using opposite James Balanced and Putnam Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if James Balanced 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.| James Balanced vs. Permanent Portfolio Class | James Balanced vs. Berwyn Income Fund | James Balanced vs. Large Cap Fund | James Balanced vs. Westcore Plus Bond |
| Putnam Global vs. Putnam Growth Opportunities | Putnam Global vs. Putnam International Equity | Putnam Global vs. George Putnam Fund | Putnam Global vs. Putnam Small 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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