Correlation Between Putnam Global and Fisher Investments
Can any of the company-specific risk be diversified away by investing in both Putnam Global and Fisher Investments 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 Fisher Investments 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 Fisher Large Cap, you can compare the effects of market volatilities on Putnam Global and Fisher Investments 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 Fisher Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Global and Fisher Investments.
Diversification Opportunities for Putnam Global and Fisher Investments
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Putnam and Fisher is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Global Financials and Fisher Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fisher Investments 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 Fisher Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fisher Investments has no effect on the direction of Putnam Global i.e., Putnam Global and Fisher Investments go up and down completely randomly.
Pair Corralation between Putnam Global and Fisher Investments
Assuming the 90 days horizon Putnam Global is expected to generate 1.37 times less return on investment than Fisher Investments. But when comparing it to its historical volatility, Putnam Global Financials is 2.11 times less risky than Fisher Investments. It trades about 0.19 of its potential returns per unit of risk. Fisher Large Cap is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,777 in Fisher Large Cap on November 3, 2024 and sell it today you would earn a total of 46.00 from holding Fisher Large Cap or generate 2.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putnam Global Financials vs. Fisher Large Cap
Performance |
| Timeline |
| Putnam Global Financials |
| Fisher Investments |
Putnam Global and Fisher Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Global and Fisher Investments
The main advantage of trading using opposite Putnam Global and Fisher Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Global position performs unexpectedly, Fisher Investments 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 Fisher Investments will offset losses from the drop in Fisher Investments' long position.| Putnam Global vs. Us Government Securities | Putnam Global vs. Dunham Porategovernment Bond | Putnam Global vs. Schwab Government Money | Putnam Global vs. Wesmark Government Bond |
| Fisher Investments vs. T Rowe Price | Fisher Investments vs. Us Vector Equity | Fisher Investments vs. The Growth Equity | Fisher Investments vs. Artisan Select 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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