Correlation Between Putnam International and Strategic Allocation:
Can any of the company-specific risk be diversified away by investing in both Putnam International and Strategic Allocation: 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 International and Strategic Allocation: into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Putnam International Capital and Strategic Allocation Aggressive, you can compare the effects of market volatilities on Putnam International and Strategic Allocation: 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 International with a short position of Strategic Allocation:. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam International and Strategic Allocation:.
Diversification Opportunities for Putnam International and Strategic Allocation:
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Putnam and Strategic is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Putnam International Capital and Strategic Allocation Aggressiv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Allocation: and Putnam International 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 International Capital are associated (or correlated) with Strategic Allocation:. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Allocation: has no effect on the direction of Putnam International i.e., Putnam International and Strategic Allocation: go up and down completely randomly.
Pair Corralation between Putnam International and Strategic Allocation:
Assuming the 90 days horizon Putnam International Capital is expected to under-perform the Strategic Allocation:. In addition to that, Putnam International is 1.43 times more volatile than Strategic Allocation Aggressive. It trades about -0.01 of its total potential returns per unit of risk. Strategic Allocation Aggressive is currently generating about 0.42 per unit of volatility. If you would invest 823.00 in Strategic Allocation Aggressive on September 1, 2024 and sell it today you would earn a total of 41.00 from holding Strategic Allocation Aggressive or generate 4.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putnam International Capital vs. Strategic Allocation Aggressiv
Performance |
| Timeline |
| Putnam International |
| Strategic Allocation: |
Putnam International and Strategic Allocation: Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam International and Strategic Allocation:
The main advantage of trading using opposite Putnam International and Strategic Allocation: positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam International position performs unexpectedly, Strategic Allocation: 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 Strategic Allocation: will offset losses from the drop in Strategic Allocation:'s long position.| Putnam International vs. Putnam Equity Income | Putnam International vs. Putnam Tax Exempt | Putnam International vs. Putnam Floating Rate | Putnam International vs. Putnam High Yield |
| Strategic Allocation: vs. Mid Cap Value | Strategic Allocation: vs. Equity Growth Fund | Strategic Allocation: vs. Income Growth Fund | Strategic Allocation: vs. Diversified Bond 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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