Correlation Between Putnam Global and Deutsche Real
Can any of the company-specific risk be diversified away by investing in both Putnam Global and Deutsche Real 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 Deutsche Real 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 Deutsche Real Estate, you can compare the effects of market volatilities on Putnam Global and Deutsche Real 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 Deutsche Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Global and Deutsche Real.
Diversification Opportunities for Putnam Global and Deutsche Real
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Putnam and Deutsche is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Global Industrials and Deutsche Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Real Estate 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 Deutsche Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Real Estate has no effect on the direction of Putnam Global i.e., Putnam Global and Deutsche Real go up and down completely randomly.
Pair Corralation between Putnam Global and Deutsche Real
Assuming the 90 days horizon Putnam Global Industrials is expected to generate 0.76 times more return on investment than Deutsche Real. However, Putnam Global Industrials is 1.31 times less risky than Deutsche Real. It trades about 0.11 of its potential returns per unit of risk. Deutsche Real Estate is currently generating about 0.05 per unit of risk. If you would invest 2,346 in Putnam Global Industrials on August 30, 2024 and sell it today you would earn a total of 1,340 from holding Putnam Global Industrials or generate 57.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putnam Global Industrials vs. Deutsche Real Estate
Performance |
| Timeline |
| Putnam Global Industrials |
| Deutsche Real Estate |
Putnam Global and Deutsche Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Global and Deutsche Real
The main advantage of trading using opposite Putnam Global and Deutsche Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Global position performs unexpectedly, Deutsche Real 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 Deutsche Real will offset losses from the drop in Deutsche Real'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 |
| Deutsche Real vs. Franklin Natural Resources | Deutsche Real vs. HUMANA INC | Deutsche Real vs. Aquagold International | Deutsche Real vs. Barloworld Ltd ADR |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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