Correlation Between Aqr Sustainable and Putnam Global
Can any of the company-specific risk be diversified away by investing in both Aqr Sustainable 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 Aqr Sustainable and Putnam Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aqr Sustainable Long Short and Putnam Global Industrials, you can compare the effects of market volatilities on Aqr Sustainable 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 Aqr Sustainable with a short position of Putnam Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Sustainable and Putnam Global.
Diversification Opportunities for Aqr Sustainable and Putnam Global
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AQR and Putnam is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Sustainable Long Short 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 Aqr 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 Aqr Sustainable Long Short 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 Aqr Sustainable i.e., Aqr Sustainable and Putnam Global go up and down completely randomly.
Pair Corralation between Aqr Sustainable and Putnam Global
Assuming the 90 days horizon Aqr Sustainable is expected to generate 1.14 times less return on investment than Putnam Global. In addition to that, Aqr Sustainable is 1.12 times more volatile than Putnam Global Industrials. It trades about 0.25 of its total potential returns per unit of risk. Putnam Global Industrials is currently generating about 0.32 per unit of volatility. If you would invest 3,537 in Putnam Global Industrials on September 2, 2024 and sell it today you would earn a total of 175.00 from holding Putnam Global Industrials or generate 4.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqr Sustainable Long Short vs. Putnam Global Industrials
Performance |
| Timeline |
| Aqr Sustainable Long |
| Putnam Global Industrials |
Aqr Sustainable and Putnam Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Sustainable and Putnam Global
The main advantage of trading using opposite Aqr Sustainable and Putnam Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Sustainable 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.| Aqr Sustainable vs. Pimco Funds | Aqr Sustainable vs. Prudential Government Money | Aqr Sustainable vs. Aim Investment Secs | Aqr Sustainable vs. Dreyfus Institutional Reserves |
| 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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