Correlation Between NYSE Composite and Putnam Global
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Putnam Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Putnam Global Incm, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Putnam Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Putnam Global.
Diversification Opportunities for NYSE Composite and Putnam Global
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NYSE and Putnam is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Putnam Global Incm in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Global Incm and NYSE Composite 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 NYSE Composite 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 Incm has no effect on the direction of NYSE Composite i.e., NYSE Composite and Putnam Global go up and down completely randomly.
Pair Corralation between NYSE Composite and Putnam Global
Assuming the 90 days trading horizon NYSE Composite is expected to generate 2.55 times more return on investment than Putnam Global. However, NYSE Composite is 2.55 times more volatile than Putnam Global Incm. It trades about 0.14 of its potential returns per unit of risk. Putnam Global Incm is currently generating about 0.1 per unit of risk. If you would invest 1,800,696 in NYSE Composite on September 1, 2024 and sell it today you would earn a total of 226,508 from holding NYSE Composite or generate 12.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
NYSE Composite vs. Putnam Global Incm
Performance |
| Timeline |
NYSE Composite and Putnam Global Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Putnam Global Incm
Pair trading matchups for Putnam Global
Pair Trading with NYSE Composite and Putnam Global
The main advantage of trading using opposite NYSE Composite and Putnam Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Acumen Pharmaceuticals | NYSE Composite vs. Mind Medicine | NYSE Composite vs. NL Industries | NYSE Composite vs. Ecovyst |
| Putnam Global vs. Franklin Federal Limited Term | Putnam Global vs. Aqr Long Short Equity | Putnam Global vs. Ab Select Longshort | Putnam Global vs. Federated Ultrashort Bond |
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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