Correlation Between ATT and Putnam Global
Can any of the company-specific risk be diversified away by investing in both ATT 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 ATT and Putnam Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATT Inc and Putnam Global Equity, you can compare the effects of market volatilities on ATT 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 ATT with a short position of Putnam Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATT and Putnam Global.
Diversification Opportunities for ATT and Putnam Global
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ATT and Putnam is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc 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 ATT 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 ATT Inc 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 ATT i.e., ATT and Putnam Global go up and down completely randomly.
Pair Corralation between ATT and Putnam Global
Taking into account the 90-day investment horizon ATT Inc is expected to generate 1.6 times more return on investment than Putnam Global. However, ATT is 1.6 times more volatile than Putnam Global Equity. It trades about 0.12 of its potential returns per unit of risk. Putnam Global Equity is currently generating about -0.19 per unit of risk. If you would invest 2,249 in ATT Inc on August 24, 2024 and sell it today you would earn a total of 70.50 from holding ATT Inc or generate 3.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ATT Inc vs. Putnam Global Equity
Performance |
| Timeline |
| ATT Inc |
| Putnam Global Equity |
ATT and Putnam Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATT and Putnam Global
The main advantage of trading using opposite ATT and Putnam Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATT 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.The idea behind ATT Inc and Putnam Global Equity pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Putnam Global vs. Pia High Yield | Putnam Global vs. Siit High Yield | Putnam Global vs. Guggenheim High Yield | Putnam Global vs. Pace 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |