Correlation Between Cref Inflation-linked and Putnam Global
Can any of the company-specific risk be diversified away by investing in both Cref Inflation-linked 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 Cref Inflation-linked and Putnam Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cref Inflation Linked Bond and Putnam Global Industrials, you can compare the effects of market volatilities on Cref Inflation-linked 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 Cref Inflation-linked with a short position of Putnam Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cref Inflation-linked and Putnam Global.
Diversification Opportunities for Cref Inflation-linked and Putnam Global
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CREF and Putnam is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Cref Inflation Linked Bond 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 Cref Inflation-linked 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 Cref Inflation Linked Bond 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 Cref Inflation-linked i.e., Cref Inflation-linked and Putnam Global go up and down completely randomly.
Pair Corralation between Cref Inflation-linked and Putnam Global
Assuming the 90 days trading horizon Cref Inflation-linked is expected to generate 5.86 times less return on investment than Putnam Global. But when comparing it to its historical volatility, Cref Inflation Linked Bond is 3.32 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 2,376 in Putnam Global Industrials on September 4, 2024 and sell it today you would earn a total of 1,348 from holding Putnam Global Industrials or generate 56.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Cref Inflation Linked Bond vs. Putnam Global Industrials
Performance |
| Timeline |
| Cref Inflation Linked |
| Putnam Global Industrials |
Cref Inflation-linked and Putnam Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cref Inflation-linked and Putnam Global
The main advantage of trading using opposite Cref Inflation-linked and Putnam Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cref Inflation-linked 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.| Cref Inflation-linked vs. Vanguard Total Stock | Cref Inflation-linked vs. Vanguard 500 Index | Cref Inflation-linked vs. Vanguard Total Stock | Cref Inflation-linked vs. Vanguard Total Stock |
| Putnam Global vs. Jhancock Diversified Macro | Putnam Global vs. Pgim Conservative Retirement | Putnam Global vs. Massmutual Select Diversified | Putnam Global vs. Lord Abbett Diversified |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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