Correlation Between Quantitative Longshort and Putnam International
Can any of the company-specific risk be diversified away by investing in both Quantitative Longshort 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 Quantitative Longshort and Putnam International 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 International Equity, you can compare the effects of market volatilities on Quantitative Longshort 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 Quantitative Longshort with a short position of Putnam International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quantitative Longshort and Putnam International.
Diversification Opportunities for Quantitative Longshort and Putnam International
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Quantitative and Putnam is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Quantitative Longshort Equity and Putnam International Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam International 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 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 Quantitative Longshort i.e., Quantitative Longshort and Putnam International go up and down completely randomly.
Pair Corralation between Quantitative Longshort and Putnam International
Assuming the 90 days horizon Quantitative Longshort Equity is expected to generate 0.45 times more return on investment than Putnam International. However, Quantitative Longshort Equity is 2.24 times less risky than Putnam International. It trades about 0.14 of its potential returns per unit of risk. Putnam International Equity is currently generating about 0.03 per unit of risk. If you would invest 1,337 in Quantitative Longshort Equity on September 1, 2024 and sell it today you would earn a total of 134.00 from holding Quantitative Longshort Equity or generate 10.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.47% |
| Values | Daily Returns |
Quantitative Longshort Equity vs. Putnam International Equity
Performance |
| Timeline |
| Quantitative Longshort |
| Putnam International |
Quantitative Longshort and Putnam International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Quantitative Longshort and Putnam International
The main advantage of trading using opposite Quantitative Longshort and Putnam International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quantitative Longshort 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.| Quantitative Longshort vs. Metropolitan West High | Quantitative Longshort vs. Pioneer High Yield | Quantitative Longshort vs. Western Asset High | Quantitative Longshort vs. Franklin High Income |
| Putnam International vs. Putnam Equity Income | Putnam International vs. Putnam Tax Exempt | Putnam International vs. Putnam Floating Rate | Putnam International 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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