Correlation Between Putnam Global and Pgim Jennison
Can any of the company-specific risk be diversified away by investing in both Putnam Global and Pgim Jennison 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 Pgim Jennison 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 Pgim Jennison Technology, you can compare the effects of market volatilities on Putnam Global and Pgim Jennison 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 Pgim Jennison. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Global and Pgim Jennison.
Diversification Opportunities for Putnam Global and Pgim Jennison
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Putnam and Pgim is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Global Financials and Pgim Jennison Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pgim Jennison Technology 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 Pgim Jennison. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pgim Jennison Technology has no effect on the direction of Putnam Global i.e., Putnam Global and Pgim Jennison go up and down completely randomly.
Pair Corralation between Putnam Global and Pgim Jennison
Assuming the 90 days horizon Putnam Global is expected to generate 5.81 times less return on investment than Pgim Jennison. But when comparing it to its historical volatility, Putnam Global Financials is 3.28 times less risky than Pgim Jennison. It trades about 0.06 of its potential returns per unit of risk. Pgim Jennison Technology is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,236 in Pgim Jennison Technology on October 9, 2024 and sell it today you would earn a total of 1,362 from holding Pgim Jennison Technology or generate 110.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 38.79% |
| Values | Daily Returns |
Putnam Global Financials vs. Pgim Jennison Technology
Performance |
| Timeline |
| Putnam Global Financials |
| Pgim Jennison Technology |
Putnam Global and Pgim Jennison Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Global and Pgim Jennison
The main advantage of trading using opposite Putnam Global and Pgim Jennison positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Global position performs unexpectedly, Pgim Jennison 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 Pgim Jennison will offset losses from the drop in Pgim Jennison'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 |
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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