Correlation Between Putnam Global and Ab Global
Can any of the company-specific risk be diversified away by investing in both Putnam Global and Ab 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 Global and Ab Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Putnam Global Financials and Ab Global Bond, you can compare the effects of market volatilities on Putnam Global and Ab 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 Global with a short position of Ab Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Global and Ab Global.
Diversification Opportunities for Putnam Global and Ab Global
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Putnam and ANAGX is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Global Financials and Ab Global Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Global Bond 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 Financials are associated (or correlated) with Ab Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Global Bond has no effect on the direction of Putnam Global i.e., Putnam Global and Ab Global go up and down completely randomly.
Pair Corralation between Putnam Global and Ab Global
Assuming the 90 days horizon Putnam Global Financials is expected to under-perform the Ab Global. In addition to that, Putnam Global is 3.41 times more volatile than Ab Global Bond. It trades about -0.35 of its total potential returns per unit of risk. Ab Global Bond is currently generating about -0.48 per unit of volatility. If you would invest 697.00 in Ab Global Bond on October 9, 2024 and sell it today you would lose (12.00) from holding Ab Global Bond or give up 1.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putnam Global Financials vs. Ab Global Bond
Performance |
| Timeline |
| Putnam Global Financials |
| Ab Global Bond |
Putnam Global and Ab Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Global and Ab Global
The main advantage of trading using opposite Putnam Global and Ab Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Global position performs unexpectedly, Ab 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 Ab Global will offset losses from the drop in Ab Global's long position.| Putnam Global vs. Putnam Equity Income | Putnam Global vs. Putnam Tax Exempt | Putnam Global vs. Putnam Floating Rate | Putnam Global vs. Putnam High Yield |
| Ab Global vs. Siit High Yield | Ab Global vs. Ab High Income | Ab Global vs. Needham Aggressive Growth | Ab Global vs. Dunham 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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