Correlation Between Putnam International and Putnam Global
Can any of the company-specific risk be diversified away by investing in both Putnam International and Putnam Global 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 Putnam Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Putnam International Equity and Putnam Global Industrials, you can compare the effects of market volatilities on Putnam International and Putnam Global 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 Putnam Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam International and Putnam Global.
Diversification Opportunities for Putnam International and Putnam Global
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Putnam and Putnam is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Putnam International Equity and Putnam Global Industrials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Global Industrials 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 Equity are associated (or correlated) with Putnam Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Global Industrials has no effect on the direction of Putnam International i.e., Putnam International and Putnam Global go up and down completely randomly.
Pair Corralation between Putnam International and Putnam Global
Assuming the 90 days horizon Putnam International is expected to generate 1.95 times less return on investment than Putnam Global. But when comparing it to its historical volatility, Putnam International Equity is 1.04 times less risky than Putnam Global. It trades about 0.06 of its potential returns per unit of risk. Putnam Global Industrials is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 2,360 in Putnam Global Industrials on August 29, 2024 and sell it today you would earn a total of 1,343 from holding Putnam Global Industrials or generate 56.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putnam International Equity vs. Putnam Global Industrials
Performance |
| Timeline |
| Putnam International |
| Putnam Global Industrials |
Putnam International and Putnam Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam International and Putnam Global
The main advantage of trading using opposite Putnam International and Putnam Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam International position performs unexpectedly, Putnam Global 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 Global will offset losses from the drop in Putnam Global's long position.| Putnam International vs. Putnam Multi Cap Growth | Putnam International vs. George Putnam Fund | Putnam International vs. Putnam Equity Income | Putnam International vs. Putnam International Capital |
| Putnam Global vs. Franklin Moderate Allocation | Putnam Global vs. Pgim Conservative Retirement | Putnam Global vs. Calvert Moderate Allocation | Putnam Global vs. Blackrock Moderate Prepared |
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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