Correlation Between Payden Absolute and Putnam Global
Can any of the company-specific risk be diversified away by investing in both Payden Absolute 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 Payden Absolute and Putnam Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Payden Absolute Return and Putnam Global Equity, you can compare the effects of market volatilities on Payden Absolute 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 Payden Absolute with a short position of Putnam Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Payden Absolute and Putnam Global.
Diversification Opportunities for Payden Absolute and Putnam Global
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Payden and Putnam is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Payden Absolute Return and Putnam Global Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Global Equity and Payden Absolute 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 Payden Absolute Return 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 Equity has no effect on the direction of Payden Absolute i.e., Payden Absolute and Putnam Global go up and down completely randomly.
Pair Corralation between Payden Absolute and Putnam Global
Assuming the 90 days horizon Payden Absolute Return is expected to generate 0.11 times more return on investment than Putnam Global. However, Payden Absolute Return is 9.2 times less risky than Putnam Global. It trades about 0.18 of its potential returns per unit of risk. Putnam Global Equity is currently generating about -0.22 per unit of risk. If you would invest 951.00 in Payden Absolute Return on August 28, 2024 and sell it today you would earn a total of 3.00 from holding Payden Absolute Return or generate 0.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Payden Absolute Return vs. Putnam Global Equity
Performance |
| Timeline |
| Payden Absolute Return |
| Putnam Global Equity |
Payden Absolute and Putnam Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Payden Absolute and Putnam Global
The main advantage of trading using opposite Payden Absolute and Putnam Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Payden Absolute 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.| Payden Absolute vs. Payden Porate Bond | Payden Absolute vs. Payden Emerging Markets | Payden Absolute vs. The Payden Regal | Payden Absolute vs. Payden E Bond |
| Putnam Global vs. Putnam Equity Income | Putnam Global vs. Putnam Tax Exempt | Putnam Global vs. Putnam Floating Rate | Putnam Global vs. Putnam High Yield |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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