Correlation Between Putnam Global and Putnam Multi-cap
Can any of the company-specific risk be diversified away by investing in both Putnam Global and Putnam Multi-cap 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 Multi-cap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Putnam Global Industrials and Putnam Multi Cap Growth, you can compare the effects of market volatilities on Putnam Global and Putnam Multi-cap 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 Multi-cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Global and Putnam Multi-cap.
Diversification Opportunities for Putnam Global and Putnam Multi-cap
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Putnam and PUTNAM is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Global Industrials and Putnam Multi Cap Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Multi 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 Industrials are associated (or correlated) with Putnam Multi-cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Multi Cap has no effect on the direction of Putnam Global i.e., Putnam Global and Putnam Multi-cap go up and down completely randomly.
Pair Corralation between Putnam Global and Putnam Multi-cap
Assuming the 90 days horizon Putnam Global Industrials is expected to generate 0.98 times more return on investment than Putnam Multi-cap. However, Putnam Global Industrials is 1.02 times less risky than Putnam Multi-cap. It trades about 0.13 of its potential returns per unit of risk. Putnam Multi Cap Growth is currently generating about 0.12 per unit of risk. If you would invest 2,692 in Putnam Global Industrials on August 31, 2024 and sell it today you would earn a total of 1,203 from holding Putnam Global Industrials or generate 44.69% 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 Industrials vs. Putnam Multi Cap Growth
Performance |
| Timeline |
| Putnam Global Industrials |
| Putnam Multi Cap |
Putnam Global and Putnam Multi-cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Global and Putnam Multi-cap
The main advantage of trading using opposite Putnam Global and Putnam Multi-cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Global position performs unexpectedly, Putnam Multi-cap 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 Multi-cap will offset losses from the drop in Putnam Multi-cap's long position.| Putnam Global vs. Barings Global Floating | Putnam Global vs. Us Global Leaders | Putnam Global vs. Scharf Global Opportunity | Putnam Global vs. T Rowe Price |
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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