Correlation Between GSE Systems and Putnam Global
Can any of the company-specific risk be diversified away by investing in both GSE Systems 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 GSE Systems and Putnam Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GSE Systems and Putnam Global Technology, you can compare the effects of market volatilities on GSE Systems 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 GSE Systems with a short position of Putnam Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of GSE Systems and Putnam Global.
Diversification Opportunities for GSE Systems and Putnam Global
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GSE and Putnam is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding GSE Systems 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 GSE Systems 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 GSE Systems 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 GSE Systems i.e., GSE Systems and Putnam Global go up and down completely randomly.
Pair Corralation between GSE Systems and Putnam Global
Considering the 90-day investment horizon GSE Systems is expected to generate 6.1 times more return on investment than Putnam Global. However, GSE Systems is 6.1 times more volatile than Putnam Global Technology. It trades about 0.03 of its potential returns per unit of risk. Putnam Global Technology is currently generating about 0.09 per unit of risk. If you would invest 476.00 in GSE Systems on September 2, 2024 and sell it today you would lose (17.00) from holding GSE Systems or give up 3.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.62% |
| Values | Daily Returns |
GSE Systems vs. Putnam Global Technology
Performance |
| Timeline |
| GSE Systems |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
| Putnam Global Technology |
GSE Systems and Putnam Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GSE Systems and Putnam Global
The main advantage of trading using opposite GSE Systems and Putnam Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GSE Systems 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.| GSE Systems vs. LifeSpeak | GSE Systems vs. RenoWorks Software | GSE Systems vs. 01 Communique Laboratory | GSE Systems vs. RESAAS Services |
| Putnam Global vs. Blackrock Science Technology | Putnam Global vs. Columbia Global Technology | Putnam Global vs. Putnam Growth Opportunities | Putnam Global vs. Morgan Stanley Multi |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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