Correlation Between Putnam Floating and Putnam International
Can any of the company-specific risk be diversified away by investing in both Putnam Floating 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 Putnam Floating and Putnam International 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 International Equity, you can compare the effects of market volatilities on Putnam Floating 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 Putnam Floating with a short position of Putnam International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Floating and Putnam International.
Diversification Opportunities for Putnam Floating and Putnam International
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Putnam and Putnam is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Floating Rate and Putnam International Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam International 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 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 Putnam Floating i.e., Putnam Floating and Putnam International go up and down completely randomly.
Pair Corralation between Putnam Floating and Putnam International
Assuming the 90 days horizon Putnam Floating is expected to generate 1.34 times less return on investment than Putnam International. But when comparing it to its historical volatility, Putnam Floating Rate is 4.11 times less risky than Putnam International. It trades about 0.21 of its potential returns per unit of risk. Putnam International Equity is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,011 in Putnam International Equity on August 28, 2024 and sell it today you would earn a total of 566.00 from holding Putnam International Equity or generate 28.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putnam Floating Rate vs. Putnam International Equity
Performance |
| Timeline |
| Putnam Floating Rate |
| Putnam International |
Putnam Floating and Putnam International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Floating and Putnam International
The main advantage of trading using opposite Putnam Floating and Putnam International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Floating 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.| Putnam Floating vs. Putnam Equity Income | Putnam Floating vs. Putnam Tax Exempt | Putnam Floating vs. Putnam High Yield | Putnam Floating vs. Putnam Massachusetts Tax |
| Putnam International vs. Putnam Equity Income | Putnam International vs. Putnam Tax Exempt | Putnam International vs. Putnam Floating Rate | Putnam International 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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