Correlation Between Putnam Global and Putnam Growth
Can any of the company-specific risk be diversified away by investing in both Putnam Global and Putnam Growth 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 Growth 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 Growth Opportunities, you can compare the effects of market volatilities on Putnam Global and Putnam Growth 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 Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Global and Putnam Growth.
Diversification Opportunities for Putnam Global and Putnam Growth
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Putnam and Putnam is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Global Industrials and Putnam Growth Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Growth Opport 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 Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Growth Opport has no effect on the direction of Putnam Global i.e., Putnam Global and Putnam Growth go up and down completely randomly.
Pair Corralation between Putnam Global and Putnam Growth
Assuming the 90 days horizon Putnam Global Industrials is expected to generate 0.75 times more return on investment than Putnam Growth. However, Putnam Global Industrials is 1.33 times less risky than Putnam Growth. It trades about 0.1 of its potential returns per unit of risk. Putnam Growth Opportunities is currently generating about 0.07 per unit of risk. If you would invest 3,619 in Putnam Global Industrials on August 30, 2024 and sell it today you would earn a total of 67.00 from holding Putnam Global Industrials or generate 1.85% 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 Growth Opportunities
Performance |
| Timeline |
| Putnam Global Industrials |
| Putnam Growth Opport |
Putnam Global and Putnam Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Global and Putnam Growth
The main advantage of trading using opposite Putnam Global and Putnam Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Global position performs unexpectedly, Putnam Growth 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 Growth will offset losses from the drop in Putnam Growth's long position.| Putnam Global vs. Franklin Moderate Allocation | Putnam Global vs. Pgim Conservative Retirement | Putnam Global vs. Calvert Moderate Allocation | Putnam Global vs. Blackrock Moderate Prepared |
| Putnam Growth vs. Putnam Equity Income | Putnam Growth vs. Putnam Multi Cap Growth | Putnam Growth vs. Putnam Global Health | Putnam Growth vs. Putnam International Equity |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |