Correlation Between Putnam International and The Hartford
Can any of the company-specific risk be diversified away by investing in both Putnam International and The Hartford 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 The Hartford 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 The Hartford Small, you can compare the effects of market volatilities on Putnam International and The Hartford 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 The Hartford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam International and The Hartford.
Diversification Opportunities for Putnam International and The Hartford
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Putnam and The is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Putnam International Capital and The Hartford Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Small 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 The Hartford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Small has no effect on the direction of Putnam International i.e., Putnam International and The Hartford go up and down completely randomly.
Pair Corralation between Putnam International and The Hartford
Assuming the 90 days horizon Putnam International Capital is expected to generate 0.71 times more return on investment than The Hartford. However, Putnam International Capital is 1.42 times less risky than The Hartford. It trades about 0.11 of its potential returns per unit of risk. The Hartford Small is currently generating about 0.06 per unit of risk. If you would invest 3,890 in Putnam International Capital on November 5, 2024 and sell it today you would earn a total of 57.00 from holding Putnam International Capital or generate 1.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putnam International Capital vs. The Hartford Small
Performance |
| Timeline |
| Putnam International |
| Hartford Small |
Putnam International and The Hartford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam International and The Hartford
The main advantage of trading using opposite Putnam International and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam International position performs unexpectedly, The Hartford 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 The Hartford will offset losses from the drop in The Hartford's long position.| Putnam International vs. Fabwx | Putnam International vs. Fkhemx | Putnam International vs. Ftufox | Putnam International vs. Fvkvwx |
| The Hartford vs. Lgm Risk Managed | The Hartford vs. Barings High Yield | The Hartford vs. Gugg Actv Invmt | The Hartford vs. Aqr Risk Parity |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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