Correlation Between Putnam Focused and Barings Emerging
Can any of the company-specific risk be diversified away by investing in both Putnam Focused and Barings Emerging 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 Focused and Barings Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Putnam Focused Equity and Barings Emerging Markets, you can compare the effects of market volatilities on Putnam Focused and Barings Emerging 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 Focused with a short position of Barings Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Focused and Barings Emerging.
Diversification Opportunities for Putnam Focused and Barings Emerging
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Putnam and Barings is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Focused Equity and Barings Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barings Emerging Markets and Putnam Focused 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 Focused Equity are associated (or correlated) with Barings Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barings Emerging Markets has no effect on the direction of Putnam Focused i.e., Putnam Focused and Barings Emerging go up and down completely randomly.
Pair Corralation between Putnam Focused and Barings Emerging
Assuming the 90 days horizon Putnam Focused Equity is expected to generate 2.23 times more return on investment than Barings Emerging. However, Putnam Focused is 2.23 times more volatile than Barings Emerging Markets. It trades about 0.16 of its potential returns per unit of risk. Barings Emerging Markets is currently generating about 0.07 per unit of risk. If you would invest 2,918 in Putnam Focused Equity on September 4, 2024 and sell it today you would earn a total of 1,057 from holding Putnam Focused Equity or generate 36.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putnam Focused Equity vs. Barings Emerging Markets
Performance |
| Timeline |
| Putnam Focused Equity |
| Barings Emerging Markets |
Putnam Focused and Barings Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Focused and Barings Emerging
The main advantage of trading using opposite Putnam Focused and Barings Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Focused position performs unexpectedly, Barings Emerging 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 Barings Emerging will offset losses from the drop in Barings Emerging's long position.| Putnam Focused vs. Putnam Equity Income | Putnam Focused vs. Putnam Tax Exempt | Putnam Focused vs. Putnam Floating Rate | Putnam Focused vs. Putnam High Yield |
| Barings Emerging vs. T Rowe Price | Barings Emerging vs. Volumetric Fund Volumetric | Barings Emerging vs. Rbb Fund | Barings Emerging vs. T Rowe Price |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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