Correlation Between Putnam Global and Applied Finance
Can any of the company-specific risk be diversified away by investing in both Putnam Global and Applied Finance 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 Putnam Global and Applied Finance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Putnam Global Equity and Applied Finance Explorer, you can compare the effects of market volatilities on Putnam Global and Applied Finance 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 Putnam Global with a short position of Applied Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Global and Applied Finance.
Diversification Opportunities for Putnam Global and Applied Finance
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Putnam and Applied is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Global Equity and Applied Finance Explorer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applied Finance Explorer and Putnam Global 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 Putnam Global Equity are associated (or correlated) with Applied Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Applied Finance Explorer has no effect on the direction of Putnam Global i.e., Putnam Global and Applied Finance go up and down completely randomly.
Pair Corralation between Putnam Global and Applied Finance
If you would invest 2,278 in Applied Finance Explorer on August 31, 2024 and sell it today you would earn a total of 149.00 from holding Applied Finance Explorer or generate 6.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putnam Global Equity vs. Applied Finance Explorer
Performance |
| Timeline |
| Putnam Global Equity |
| Applied Finance Explorer |
Putnam Global and Applied Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Global and Applied Finance
The main advantage of trading using opposite Putnam Global and Applied Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Global position performs unexpectedly, Applied Finance 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 Applied Finance will offset losses from the drop in Applied Finance's long position.| Putnam Global vs. Applied Finance Explorer | Putnam Global vs. Boston Partners Small | Putnam Global vs. Great West Loomis Sayles | Putnam Global vs. Mid Cap Value Profund |
| Applied Finance vs. Vanguard Small Cap Value | Applied Finance vs. Vanguard Small Cap Value | Applied Finance vs. Us Targeted Value | Applied Finance vs. Undiscovered Managers Behavioral |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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