Correlation Between Putnam Global and Mid Cap
Can any of the company-specific risk be diversified away by investing in both Putnam Global and Mid 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 Mid Cap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Putnam Global Technology and Mid Cap Growth, you can compare the effects of market volatilities on Putnam Global and Mid 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 Mid Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Global and Mid Cap.
Diversification Opportunities for Putnam Global and Mid Cap
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Putnam and Mid is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Global Technology and Mid Cap Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mid Cap Growth 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 Technology are associated (or correlated) with Mid Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mid Cap Growth has no effect on the direction of Putnam Global i.e., Putnam Global and Mid Cap go up and down completely randomly.
Pair Corralation between Putnam Global and Mid Cap
Assuming the 90 days horizon Putnam Global is expected to generate 34.03 times less return on investment than Mid Cap. But when comparing it to its historical volatility, Putnam Global Technology is 1.56 times less risky than Mid Cap. It trades about 0.02 of its potential returns per unit of risk. Mid Cap Growth is currently generating about 0.52 of returns per unit of risk over similar time horizon. If you would invest 1,235 in Mid Cap Growth on August 26, 2024 and sell it today you would earn a total of 300.00 from holding Mid Cap Growth or generate 24.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putnam Global Technology vs. Mid Cap Growth
Performance |
| Timeline |
| Putnam Global Technology |
| Mid Cap Growth |
Putnam Global and Mid Cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Global and Mid Cap
The main advantage of trading using opposite Putnam Global and Mid Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Global position performs unexpectedly, Mid 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 Mid Cap will offset losses from the drop in Mid Cap's long position.| Putnam Global vs. Blackrock Science Technology | Putnam Global vs. Columbia Global Technology | Putnam Global vs. Putnam Growth Opportunities | Putnam Global vs. Morgan Stanley Multi |
| Mid Cap vs. Morgan Stanley Multi | Mid Cap vs. Growth Portfolio Class | Mid Cap vs. Small Pany Growth | Mid Cap vs. Blackrock Science Technology |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |