Correlation Between Putnam Global and Jp Morgan
Can any of the company-specific risk be diversified away by investing in both Putnam Global and Jp Morgan 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 Jp Morgan 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 Jp Morgan Smartretirement, you can compare the effects of market volatilities on Putnam Global and Jp Morgan 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 Jp Morgan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Global and Jp Morgan.
Diversification Opportunities for Putnam Global and Jp Morgan
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Putnam and JTSQX is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Global Financials and Jp Morgan Smartretirement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jp Morgan Smartretirement 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 Jp Morgan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jp Morgan Smartretirement has no effect on the direction of Putnam Global i.e., Putnam Global and Jp Morgan go up and down completely randomly.
Pair Corralation between Putnam Global and Jp Morgan
Assuming the 90 days horizon Putnam Global Financials is expected to under-perform the Jp Morgan. But the mutual fund apears to be less risky and, when comparing its historical volatility, Putnam Global Financials is 1.19 times less risky than Jp Morgan. The mutual fund trades about -0.03 of its potential returns per unit of risk. The Jp Morgan Smartretirement is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 2,293 in Jp Morgan Smartretirement on October 19, 2024 and sell it today you would earn a total of 2.00 from holding Jp Morgan Smartretirement or generate 0.09% 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. Jp Morgan Smartretirement
Performance |
| Timeline |
| Putnam Global Financials |
| Jp Morgan Smartretirement |
Putnam Global and Jp Morgan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Global and Jp Morgan
The main advantage of trading using opposite Putnam Global and Jp Morgan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Global position performs unexpectedly, Jp Morgan 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 Jp Morgan will offset losses from the drop in Jp Morgan's long position.| Putnam Global vs. Vest Large Cap | Putnam Global vs. Touchstone Large Cap | Putnam Global vs. Guidemark Large Cap | Putnam Global vs. Calvert Large Cap |
| Jp Morgan vs. John Hancock Financial | Jp Morgan vs. Prudential Financial Services | Jp Morgan vs. Vanguard Financials Index | Jp Morgan vs. Putnam Global Financials |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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