Correlation Between Putnam Global and Putman Absolute
Can any of the company-specific risk be diversified away by investing in both Putnam Global and Putman Absolute 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 Putman Absolute into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Putnam Global Income and Putman Absolute Return, you can compare the effects of market volatilities on Putnam Global and Putman Absolute 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 Putman Absolute. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Global and Putman Absolute.
Diversification Opportunities for Putnam Global and Putman Absolute
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Putnam and Putman is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Global Income and Putman Absolute Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putman Absolute Return 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 Income are associated (or correlated) with Putman Absolute. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putman Absolute Return has no effect on the direction of Putnam Global i.e., Putnam Global and Putman Absolute go up and down completely randomly.
Pair Corralation between Putnam Global and Putman Absolute
Assuming the 90 days horizon Putnam Global is expected to generate 1.47 times less return on investment than Putman Absolute. But when comparing it to its historical volatility, Putnam Global Income is 1.2 times less risky than Putman Absolute. It trades about 0.08 of its potential returns per unit of risk. Putman Absolute Return is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 823.00 in Putman Absolute Return on September 1, 2024 and sell it today you would earn a total of 6.00 from holding Putman Absolute Return or generate 0.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putnam Global Income vs. Putman Absolute Return
Performance |
| Timeline |
| Putnam Global Income |
| Putman Absolute Return |
Putnam Global and Putman Absolute Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Global and Putman Absolute
The main advantage of trading using opposite Putnam Global and Putman Absolute positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Global position performs unexpectedly, Putman Absolute 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 Putman Absolute will offset losses from the drop in Putman Absolute'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 |
| Putman Absolute vs. Blackrock Inflation Protected | Putman Absolute vs. Ab Bond Inflation | Putman Absolute vs. The Hartford Inflation | Putman Absolute vs. Guidepath Managed Futures |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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