Correlation Between Putnam U and Putnam International
Can any of the company-specific risk be diversified away by investing in both Putnam U and Putnam International 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 U and Putnam International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Putnam U S and Putnam International Value, you can compare the effects of market volatilities on Putnam U and Putnam International 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 U with a short position of Putnam International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam U and Putnam International.
Diversification Opportunities for Putnam U and Putnam International
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Putnam and Putnam is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Putnam U S and Putnam International Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam International and Putnam U 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 U S are associated (or correlated) with Putnam International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam International has no effect on the direction of Putnam U i.e., Putnam U and Putnam International go up and down completely randomly.
Pair Corralation between Putnam U and Putnam International
Assuming the 90 days horizon Putnam U S is expected to generate 0.48 times more return on investment than Putnam International. However, Putnam U S is 2.09 times less risky than Putnam International. It trades about 0.12 of its potential returns per unit of risk. Putnam International Value is currently generating about 0.03 per unit of risk. If you would invest 827.00 in Putnam U S on August 30, 2024 and sell it today you would earn a total of 41.00 from holding Putnam U S or generate 4.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Putnam U S vs. Putnam International Value
Performance |
| Timeline |
| Putnam U S |
| Putnam International |
Putnam U and Putnam International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam U and Putnam International
The main advantage of trading using opposite Putnam U and Putnam International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam U position performs unexpectedly, Putnam International 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 International will offset losses from the drop in Putnam International's long position.| Putnam U vs. Putnam Equity Income | Putnam U vs. Putnam Tax Exempt | Putnam U vs. Putnam Floating Rate | Putnam U vs. Putnam High Yield |
| Putnam International vs. Putnam Equity Income | Putnam International vs. Putnam Tax Exempt | Putnam International vs. Putnam Floating Rate | Putnam International 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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