Correlation Between NYSE Composite and Putnam International
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Putnam International 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 International Equity, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Putnam International. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Putnam International.
Diversification Opportunities for NYSE Composite and Putnam International
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between NYSE and Putnam is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Putnam International Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam International 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 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 NYSE Composite i.e., NYSE Composite and Putnam International go up and down completely randomly.
Pair Corralation between NYSE Composite and Putnam International
Assuming the 90 days trading horizon NYSE Composite is expected to under-perform the Putnam International. In addition to that, NYSE Composite is 1.1 times more volatile than Putnam International Equity. It trades about -0.11 of its total potential returns per unit of risk. Putnam International Equity is currently generating about -0.07 per unit of volatility. If you would invest 2,792 in Putnam International Equity on January 18, 2025 and sell it today you would lose (111.00) from holding Putnam International Equity or give up 3.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Putnam International Equity
Performance |
| Timeline |
NYSE Composite and Putnam International Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Putnam International Equity
Pair trading matchups for Putnam International
Pair Trading with NYSE Composite and Putnam International
The main advantage of trading using opposite NYSE Composite and Putnam International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Oasis Hotel Resort | NYSE Composite vs. Avarone Metals | NYSE Composite vs. RLJ Lodging Trust | NYSE Composite vs. flyExclusive, |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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