Correlation Between Putnam Global and World Energy
Can any of the company-specific risk be diversified away by investing in both Putnam Global and World Energy 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 World Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Putnam Global Health and World Energy Fund, you can compare the effects of market volatilities on Putnam Global and World Energy 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 World Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Global and World Energy.
Diversification Opportunities for Putnam Global and World Energy
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Putnam and World is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Global Health and World Energy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on World Energy 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 Health are associated (or correlated) with World Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of World Energy has no effect on the direction of Putnam Global i.e., Putnam Global and World Energy go up and down completely randomly.
Pair Corralation between Putnam Global and World Energy
Assuming the 90 days horizon Putnam Global Health is expected to under-perform the World Energy. But the mutual fund apears to be less risky and, when comparing its historical volatility, Putnam Global Health is 1.55 times less risky than World Energy. The mutual fund trades about -0.03 of its potential returns per unit of risk. The World Energy Fund is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 1,419 in World Energy Fund on September 1, 2024 and sell it today you would earn a total of 127.00 from holding World Energy Fund or generate 8.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putnam Global Health vs. World Energy Fund
Performance |
| Timeline |
| Putnam Global Health |
| World Energy |
Putnam Global and World Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Global and World Energy
The main advantage of trading using opposite Putnam Global and World Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Global position performs unexpectedly, World Energy 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 World Energy will offset losses from the drop in World Energy's long position.| Putnam Global vs. World Energy Fund | Putnam Global vs. Short Oil Gas | Putnam Global vs. Clearbridge Energy Mlp | Putnam Global vs. Oil Gas Ultrasector |
| World Energy vs. Franklin Lifesmart Retirement | World Energy vs. Qs Moderate Growth | World Energy vs. Jp Morgan Smartretirement | World Energy vs. Saat Moderate Strategy |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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