Correlation Between Putnam Sustainable and Putnam ETF
Can any of the company-specific risk be diversified away by investing in both Putnam Sustainable and Putnam ETF 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 Sustainable and Putnam ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Putnam Sustainable Leaders and Putnam ETF Trust, you can compare the effects of market volatilities on Putnam Sustainable and Putnam ETF 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 Sustainable with a short position of Putnam ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Sustainable and Putnam ETF.
Diversification Opportunities for Putnam Sustainable and Putnam ETF
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Putnam and Putnam is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Sustainable Leaders and Putnam ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam ETF Trust and Putnam Sustainable 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 Sustainable Leaders are associated (or correlated) with Putnam ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam ETF Trust has no effect on the direction of Putnam Sustainable i.e., Putnam Sustainable and Putnam ETF go up and down completely randomly.
Pair Corralation between Putnam Sustainable and Putnam ETF
Given the investment horizon of 90 days Putnam Sustainable Leaders is expected to generate 1.01 times more return on investment than Putnam ETF. However, Putnam Sustainable is 1.01 times more volatile than Putnam ETF Trust. It trades about 0.11 of its potential returns per unit of risk. Putnam ETF Trust is currently generating about 0.1 per unit of risk. If you would invest 2,190 in Putnam Sustainable Leaders on August 30, 2024 and sell it today you would earn a total of 1,284 from holding Putnam Sustainable Leaders or generate 58.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putnam Sustainable Leaders vs. Putnam ETF Trust
Performance |
| Timeline |
| Putnam Sustainable |
| Putnam ETF Trust |
Putnam Sustainable and Putnam ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Sustainable and Putnam ETF
The main advantage of trading using opposite Putnam Sustainable and Putnam ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Sustainable position performs unexpectedly, Putnam ETF 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 Putnam ETF will offset losses from the drop in Putnam ETF's long position.| Putnam Sustainable vs. Putnam Sustainable Future | Putnam Sustainable vs. Putnam Focused Large | Putnam Sustainable vs. Putnam Focused Large | Putnam Sustainable vs. Overlay Shares Hedged |
| Putnam ETF vs. Putnam Sustainable Future | Putnam ETF vs. Putnam Sustainable Leaders | Putnam ETF vs. Putnam Focused Large | Putnam ETF vs. Putnam Biorevolution ETF |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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