Correlation Between Putnam Floating and Putnam Global
Can any of the company-specific risk be diversified away by investing in both Putnam Floating 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 Putnam Floating and Putnam Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Putnam Floating Rate and Putnam Global Industrials, you can compare the effects of market volatilities on Putnam Floating 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 Putnam Floating with a short position of Putnam Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Floating and Putnam Global.
Diversification Opportunities for Putnam Floating and Putnam Global
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Putnam and Putnam is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Floating Rate and Putnam Global Industrials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Global Industrials and Putnam Floating 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 Floating Rate 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 Industrials has no effect on the direction of Putnam Floating i.e., Putnam Floating and Putnam Global go up and down completely randomly.
Pair Corralation between Putnam Floating and Putnam Global
Assuming the 90 days horizon Putnam Floating is expected to generate 2.4 times less return on investment than Putnam Global. But when comparing it to its historical volatility, Putnam Floating Rate is 4.56 times less risky than Putnam Global. It trades about 0.21 of its potential returns per unit of risk. Putnam Global Industrials is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 2,346 in Putnam Global Industrials on August 30, 2024 and sell it today you would earn a total of 1,340 from holding Putnam Global Industrials or generate 57.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putnam Floating Rate vs. Putnam Global Industrials
Performance |
| Timeline |
| Putnam Floating Rate |
| Putnam Global Industrials |
Putnam Floating and Putnam Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Floating and Putnam Global
The main advantage of trading using opposite Putnam Floating and Putnam Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Floating 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.| Putnam Floating vs. Aqr Large Cap | Putnam Floating vs. Hartford Moderate Allocation | Putnam Floating vs. Washington Mutual Investors | Putnam Floating vs. Upright Assets Allocation |
| Putnam Global vs. Franklin Moderate Allocation | Putnam Global vs. Pgim Conservative Retirement | Putnam Global vs. Calvert Moderate Allocation | Putnam Global vs. Blackrock Moderate Prepared |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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