Correlation Between Putnam Global and Aqr Diversified
Can any of the company-specific risk be diversified away by investing in both Putnam Global and Aqr Diversified 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 Aqr Diversified 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 Aqr Diversified Arbitrage, you can compare the effects of market volatilities on Putnam Global and Aqr Diversified 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 Aqr Diversified. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Global and Aqr Diversified.
Diversification Opportunities for Putnam Global and Aqr Diversified
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Putnam and Aqr is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Global Health and Aqr Diversified Arbitrage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Diversified Arbitrage 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 Aqr Diversified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Diversified Arbitrage has no effect on the direction of Putnam Global i.e., Putnam Global and Aqr Diversified go up and down completely randomly.
Pair Corralation between Putnam Global and Aqr Diversified
Assuming the 90 days horizon Putnam Global Health is expected to generate 5.51 times more return on investment than Aqr Diversified. However, Putnam Global is 5.51 times more volatile than Aqr Diversified Arbitrage. It trades about 0.04 of its potential returns per unit of risk. Aqr Diversified Arbitrage is currently generating about 0.12 per unit of risk. If you would invest 6,835 in Putnam Global Health on September 3, 2024 and sell it today you would earn a total of 233.00 from holding Putnam Global Health or generate 3.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putnam Global Health vs. Aqr Diversified Arbitrage
Performance |
| Timeline |
| Putnam Global Health |
| Aqr Diversified Arbitrage |
Putnam Global and Aqr Diversified Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Global and Aqr Diversified
The main advantage of trading using opposite Putnam Global and Aqr Diversified positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Global position performs unexpectedly, Aqr Diversified 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 Aqr Diversified will offset losses from the drop in Aqr Diversified's long position.| Putnam Global vs. Adams Diversified Equity | Putnam Global vs. Aqr Diversified Arbitrage | Putnam Global vs. Oppenheimer International Diversified | Putnam Global vs. Harbor Diversified International |
| Aqr Diversified vs. Eip Growth And | Aqr Diversified vs. Mid Cap Growth | Aqr Diversified vs. Smallcap Growth Fund | Aqr Diversified vs. Qs Growth Fund |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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