Correlation Between Us Government and Putnam Global
Can any of the company-specific risk be diversified away by investing in both Us Government 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 Us Government and Putnam Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Us Government Securities and Putnam Global Industrials, you can compare the effects of market volatilities on Us Government 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 Us Government with a short position of Putnam Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Us Government and Putnam Global.
Diversification Opportunities for Us Government and Putnam Global
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between USGFX and Putnam is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Us Government Securities 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 Us Government 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 Us Government Securities 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 Us Government i.e., Us Government and Putnam Global go up and down completely randomly.
Pair Corralation between Us Government and Putnam Global
Assuming the 90 days horizon Us Government is expected to generate 14.53 times less return on investment than Putnam Global. But when comparing it to its historical volatility, Us Government Securities is 2.71 times less risky than Putnam Global. It trades about 0.03 of its potential returns per unit of risk. Putnam Global Industrials is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 3,318 in Putnam Global Industrials on August 29, 2024 and sell it today you would earn a total of 85.00 from holding Putnam Global Industrials or generate 2.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Us Government Securities vs. Putnam Global Industrials
Performance |
| Timeline |
| Us Government Securities |
| Putnam Global Industrials |
Us Government and Putnam Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Us Government and Putnam Global
The main advantage of trading using opposite Us Government and Putnam Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Us Government 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.| Us Government vs. Shelton Funds | Us Government vs. Artisan Thematic Fund | Us Government vs. Versatile Bond Portfolio | Us Government vs. Barings Active Short |
| Putnam Global vs. Franklin Adjustable Government | Putnam Global vs. Us Government Securities | Putnam Global vs. Short Term Government Fund | Putnam Global vs. Lord Abbett Government |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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