Correlation Between Putnam U and Ab Global
Can any of the company-specific risk be diversified away by investing in both Putnam U and Ab Global 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 Ab Global 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 Ab Global Real, you can compare the effects of market volatilities on Putnam U and Ab Global 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 Ab Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam U and Ab Global.
Diversification Opportunities for Putnam U and Ab Global
Very poor diversification
The 3 months correlation between Putnam and AEEIX is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Putnam U S and Ab Global Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Global Real 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 Ab Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Global Real has no effect on the direction of Putnam U i.e., Putnam U and Ab Global go up and down completely randomly.
Pair Corralation between Putnam U and Ab Global
Assuming the 90 days horizon Putnam U is expected to generate 3.22 times less return on investment than Ab Global. But when comparing it to its historical volatility, Putnam U S is 2.15 times less risky than Ab Global. It trades about 0.03 of its potential returns per unit of risk. Ab Global Real is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,311 in Ab Global Real on September 4, 2024 and sell it today you would earn a total of 226.00 from holding Ab Global Real or generate 17.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Putnam U S vs. Ab Global Real
Performance |
| Timeline |
| Putnam U S |
| Ab Global Real |
Putnam U and Ab Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam U and Ab Global
The main advantage of trading using opposite Putnam U and Ab Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam U position performs unexpectedly, Ab Global 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 Ab Global will offset losses from the drop in Ab Global's long position.| Putnam U vs. George Putnam Fund | Putnam U vs. Putnam Equity Income | Putnam U vs. Putnam International Equity | Putnam U vs. Aquagold International |
| Ab Global vs. Us Government Securities | Ab Global vs. Us Government Securities | Ab Global vs. Prudential Government Income | Ab Global vs. Dunham Porategovernment Bond |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |