Correlation Between Putnam Global and Putnam Focused
Can any of the company-specific risk be diversified away by investing in both Putnam Global and Putnam Focused 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 Putnam Focused into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Putnam Global Incm and Putnam Focused Equity, you can compare the effects of market volatilities on Putnam Global and Putnam Focused 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 Putnam Focused. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Global and Putnam Focused.
Diversification Opportunities for Putnam Global and Putnam Focused
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Putnam and Putnam is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Global Incm and Putnam Focused Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Focused Equity 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 Incm are associated (or correlated) with Putnam Focused. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Focused Equity has no effect on the direction of Putnam Global i.e., Putnam Global and Putnam Focused go up and down completely randomly.
Pair Corralation between Putnam Global and Putnam Focused
Assuming the 90 days horizon Putnam Global is expected to generate 9.59 times less return on investment than Putnam Focused. But when comparing it to its historical volatility, Putnam Global Incm is 2.53 times less risky than Putnam Focused. It trades about 0.03 of its potential returns per unit of risk. Putnam Focused Equity is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 2,507 in Putnam Focused Equity on September 2, 2024 and sell it today you would earn a total of 1,454 from holding Putnam Focused Equity or generate 58.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putnam Global Incm vs. Putnam Focused Equity
Performance |
| Timeline |
| Putnam Global Incm |
| Putnam Focused Equity |
Putnam Global and Putnam Focused Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Global and Putnam Focused
The main advantage of trading using opposite Putnam Global and Putnam Focused positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Global position performs unexpectedly, Putnam Focused 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 Putnam Focused will offset losses from the drop in Putnam Focused'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 |
| Putnam Focused vs. Putnam Equity Income | Putnam Focused vs. Putnam Tax Exempt | Putnam Focused vs. Putnam Floating Rate | Putnam Focused vs. Putnam High Yield |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Global Correlations Find global opportunities by holding instruments from different markets |