Correlation Between Putnam Global and Global Fixed
Can any of the company-specific risk be diversified away by investing in both Putnam Global and Global Fixed 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 Global Fixed 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 Global Fixed Income, you can compare the effects of market volatilities on Putnam Global and Global Fixed 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 Global Fixed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Global and Global Fixed.
Diversification Opportunities for Putnam Global and Global Fixed
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Putnam and Global is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Global Financials and Global Fixed Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Fixed Income 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 Global Fixed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Fixed Income has no effect on the direction of Putnam Global i.e., Putnam Global and Global Fixed go up and down completely randomly.
Pair Corralation between Putnam Global and Global Fixed
Assuming the 90 days horizon Putnam Global is expected to generate 1.05 times less return on investment than Global Fixed. In addition to that, Putnam Global is 2.26 times more volatile than Global Fixed Income. It trades about 0.09 of its total potential returns per unit of risk. Global Fixed Income is currently generating about 0.2 per unit of volatility. If you would invest 521.00 in Global Fixed Income on October 24, 2024 and sell it today you would earn a total of 4.00 from holding Global Fixed Income or generate 0.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Putnam Global Financials vs. Global Fixed Income
Performance |
| Timeline |
| Putnam Global Financials |
| Global Fixed Income |
Putnam Global and Global Fixed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Global and Global Fixed
The main advantage of trading using opposite Putnam Global and Global Fixed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Global position performs unexpectedly, Global Fixed 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 Global Fixed will offset losses from the drop in Global Fixed's long position.| Putnam Global vs. Mutual Of America | Putnam Global vs. Small Cap Growth Profund | Putnam Global vs. Amg River Road | Putnam Global vs. Great West Loomis Sayles |
| Global Fixed vs. Victory Incore Fund | Global Fixed vs. Issachar Fund Class | Global Fixed vs. Tax Managed Mid Small | Global Fixed vs. Locorr Dynamic Equity |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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