Correlation Between Highland Long/short and Putnam Global
Can any of the company-specific risk be diversified away by investing in both Highland Long/short 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 Highland Long/short and Putnam Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Highland Longshort Healthcare and Putnam Global Health, you can compare the effects of market volatilities on Highland Long/short 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 Highland Long/short with a short position of Putnam Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highland Long/short and Putnam Global.
Diversification Opportunities for Highland Long/short and Putnam Global
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Highland and Putnam is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Highland Longshort Healthcare and Putnam Global Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Global Health and Highland Long/short 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 Highland Longshort Healthcare 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 Health has no effect on the direction of Highland Long/short i.e., Highland Long/short and Putnam Global go up and down completely randomly.
Pair Corralation between Highland Long/short and Putnam Global
Assuming the 90 days horizon Highland Long/short is expected to generate 2.03 times less return on investment than Putnam Global. But when comparing it to its historical volatility, Highland Longshort Healthcare is 3.84 times less risky than Putnam Global. It trades about 0.15 of its potential returns per unit of risk. Putnam Global Health is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 6,055 in Putnam Global Health on September 4, 2024 and sell it today you would earn a total of 1,036 from holding Putnam Global Health or generate 17.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Highland Longshort Healthcare vs. Putnam Global Health
Performance |
| Timeline |
| Highland Long/short |
| Putnam Global Health |
Highland Long/short and Putnam Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highland Long/short and Putnam Global
The main advantage of trading using opposite Highland Long/short and Putnam Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highland Long/short 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.| Highland Long/short vs. Angel Oak Financial | Highland Long/short vs. Blrc Sgy Mnp | Highland Long/short vs. Legg Mason Partners | Highland Long/short vs. Federated Pennsylvania Municipal |
| 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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