Correlation Between Quantitative Longshort and Putnam Global
Can any of the company-specific risk be diversified away by investing in both Quantitative Longshort 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 Quantitative Longshort and Putnam Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quantitative Longshort Equity and Putnam Global Industrials, you can compare the effects of market volatilities on Quantitative Longshort 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 Quantitative Longshort with a short position of Putnam Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quantitative Longshort and Putnam Global.
Diversification Opportunities for Quantitative Longshort and Putnam Global
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Quantitative and Putnam is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Quantitative Longshort Equity 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 Quantitative Longshort 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 Quantitative Longshort Equity 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 Quantitative Longshort i.e., Quantitative Longshort and Putnam Global go up and down completely randomly.
Pair Corralation between Quantitative Longshort and Putnam Global
Assuming the 90 days horizon Quantitative Longshort is expected to generate 2.64 times less return on investment than Putnam Global. But when comparing it to its historical volatility, Quantitative Longshort Equity is 2.34 times less risky than Putnam Global. It trades about 0.1 of its potential returns per unit of risk. Putnam Global Industrials is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 2,380 in Putnam Global Industrials on September 2, 2024 and sell it today you would earn a total of 1,332 from holding Putnam Global Industrials or generate 55.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Quantitative Longshort Equity vs. Putnam Global Industrials
Performance |
| Timeline |
| Quantitative Longshort |
| Putnam Global Industrials |
Quantitative Longshort and Putnam Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Quantitative Longshort and Putnam Global
The main advantage of trading using opposite Quantitative Longshort and Putnam Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quantitative Longshort 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.| Quantitative Longshort vs. The Hartford Small | Quantitative Longshort vs. Small Midcap Dividend Income | Quantitative Longshort vs. Jpmorgan Small Cap | Quantitative Longshort vs. Vanguard Small Cap Growth |
| Putnam Global vs. Putnam Equity Income | Putnam Global vs. Putnam Tax Exempt | Putnam Global vs. Putnam Floating Rate | Putnam Global vs. Putnam High Yield |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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