Correlation Between Putnam Global and Us Government
Can any of the company-specific risk be diversified away by investing in both Putnam Global and Us Government 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 Us Government 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 Us Government Securities, you can compare the effects of market volatilities on Putnam Global and Us Government 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 Us Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Global and Us Government.
Diversification Opportunities for Putnam Global and Us Government
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Putnam and RGVJX is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Global Incm and Us Government Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Us Government Securities 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 Us Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Us Government Securities has no effect on the direction of Putnam Global i.e., Putnam Global and Us Government go up and down completely randomly.
Pair Corralation between Putnam Global and Us Government
Assuming the 90 days horizon Putnam Global Incm is expected to generate 0.77 times more return on investment than Us Government. However, Putnam Global Incm is 1.3 times less risky than Us Government. It trades about 0.04 of its potential returns per unit of risk. Us Government Securities is currently generating about 0.02 per unit of risk. If you would invest 951.00 in Putnam Global Incm on September 2, 2024 and sell it today you would earn a total of 64.00 from holding Putnam Global Incm or generate 6.73% 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 Incm vs. Us Government Securities
Performance |
| Timeline |
| Putnam Global Incm |
| Us Government Securities |
Putnam Global and Us Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Global and Us Government
The main advantage of trading using opposite Putnam Global and Us Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Global position performs unexpectedly, Us Government 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 Us Government will offset losses from the drop in Us Government'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 |
| Us Government vs. Barings Global Floating | Us Government vs. Wasatch Global Opportunities | Us Government vs. Dreyfusstandish Global Fixed | Us Government vs. Blue Current Global |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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