Correlation Between Putnam Global and Americafirst Large
Can any of the company-specific risk be diversified away by investing in both Putnam Global and Americafirst Large 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 Americafirst Large 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 Americafirst Large Cap, you can compare the effects of market volatilities on Putnam Global and Americafirst Large 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 Americafirst Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Global and Americafirst Large.
Diversification Opportunities for Putnam Global and Americafirst Large
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Putnam and Americafirst is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Global Income and Americafirst Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Americafirst Large Cap 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 Americafirst Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Americafirst Large Cap has no effect on the direction of Putnam Global i.e., Putnam Global and Americafirst Large go up and down completely randomly.
Pair Corralation between Putnam Global and Americafirst Large
Assuming the 90 days horizon Putnam Global is expected to generate 4.49 times less return on investment than Americafirst Large. But when comparing it to its historical volatility, Putnam Global Income is 2.68 times less risky than Americafirst Large. It trades about 0.05 of its potential returns per unit of risk. Americafirst Large Cap is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,046 in Americafirst Large Cap on September 14, 2024 and sell it today you would earn a total of 394.00 from holding Americafirst Large Cap or generate 37.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Putnam Global Income vs. Americafirst Large Cap
Performance |
| Timeline |
| Putnam Global Income |
| Americafirst Large Cap |
Putnam Global and Americafirst Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Global and Americafirst Large
The main advantage of trading using opposite Putnam Global and Americafirst Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Global position performs unexpectedly, Americafirst Large 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 Americafirst Large will offset losses from the drop in Americafirst Large'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 |
| Americafirst Large vs. Western Asset Diversified | Americafirst Large vs. Aqr Diversified Arbitrage | Americafirst Large vs. Guggenheim Diversified Income | Americafirst Large vs. Tax Free Conservative Income |
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 Stocks Directory module to find actively traded stocks across global markets.
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