Correlation Between Putnam Sustainable and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Putnam Sustainable and Dow Jones 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 Sustainable and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Putnam Sustainable Future and Dow Jones Industrial, you can compare the effects of market volatilities on Putnam Sustainable and Dow Jones 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 Sustainable with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Sustainable and Dow Jones.
Diversification Opportunities for Putnam Sustainable and Dow Jones
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Putnam and Dow is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Sustainable Future and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Putnam Sustainable 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 Sustainable Future are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Putnam Sustainable i.e., Putnam Sustainable and Dow Jones go up and down completely randomly.
Pair Corralation between Putnam Sustainable and Dow Jones
Given the investment horizon of 90 days Putnam Sustainable Future is expected to under-perform the Dow Jones. In addition to that, Putnam Sustainable is 1.71 times more volatile than Dow Jones Industrial. It trades about -0.33 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about -0.25 per unit of volatility. If you would invest 4,485,035 in Dow Jones Industrial on November 29, 2024 and sell it today you would lose (141,723) from holding Dow Jones Industrial or give up 3.16% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Putnam Sustainable Future vs. Dow Jones Industrial
Performance |
Timeline |
Putnam Sustainable and Dow Jones Volatility Contrast
Predicted Return Density |
Returns |
Putnam Sustainable Future
Pair trading matchups for Putnam Sustainable
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Putnam Sustainable and Dow Jones
The main advantage of trading using opposite Putnam Sustainable and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Sustainable position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.Putnam Sustainable vs. Putnam Sustainable Leaders | ||
Putnam Sustainable vs. Putnam Focused Large | ||
Putnam Sustainable vs. FlexShares STOXX Global | ||
Putnam Sustainable vs. Putnam Focused Large |
Dow Jones vs. Starbucks | ||
Dow Jones vs. Westinghouse Air Brake | ||
Dow Jones vs. Finnair Oyj | ||
Dow Jones vs. Mesa Air Group |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |