Correlation Between Capital World and Putnam Global
Can any of the company-specific risk be diversified away by investing in both Capital World 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 Capital World and Putnam Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capital World Bond and Putnam Global Incm, you can compare the effects of market volatilities on Capital World 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 Capital World with a short position of Putnam Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital World and Putnam Global.
Diversification Opportunities for Capital World and Putnam Global
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Capital and Putnam is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Capital World Bond and Putnam Global Incm in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Global Incm and Capital World 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 Capital World 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 Incm has no effect on the direction of Capital World i.e., Capital World and Putnam Global go up and down completely randomly.
Pair Corralation between Capital World and Putnam Global
Assuming the 90 days horizon Capital World Bond is expected to under-perform the Putnam Global. In addition to that, Capital World is 1.69 times more volatile than Putnam Global Incm. It trades about -0.19 of its total potential returns per unit of risk. Putnam Global Incm is currently generating about -0.1 per unit of volatility. If you would invest 1,010 in Putnam Global Incm on August 24, 2024 and sell it today you would lose (5.00) from holding Putnam Global Incm or give up 0.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Capital World Bond vs. Putnam Global Incm
Performance |
| Timeline |
| Capital World Bond |
| Putnam Global Incm |
Capital World and Putnam Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capital World and Putnam Global
The main advantage of trading using opposite Capital World and Putnam Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital World 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.| Capital World vs. Putnam Convertible Incm Gwth | Capital World vs. Rationalpier 88 Convertible | Capital World vs. Invesco Vertible Securities | Capital World vs. Mainstay Vertible Fund |
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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