Correlation Between Wt Mutual and Putnam Global
Can any of the company-specific risk be diversified away by investing in both Wt Mutual 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 Wt Mutual and Putnam Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wt Mutual Fund and Putnam Global Income, you can compare the effects of market volatilities on Wt Mutual 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 Wt Mutual with a short position of Putnam Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wt Mutual and Putnam Global.
Diversification Opportunities for Wt Mutual and Putnam Global
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between WGSXX and Putnam is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Wt Mutual Fund and Putnam Global Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Global Income and Wt Mutual 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 Wt Mutual Fund 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 Income has no effect on the direction of Wt Mutual i.e., Wt Mutual and Putnam Global go up and down completely randomly.
Pair Corralation between Wt Mutual and Putnam Global
Assuming the 90 days horizon Wt Mutual Fund is expected to generate 46.72 times more return on investment than Putnam Global. However, Wt Mutual is 46.72 times more volatile than Putnam Global Income. It trades about 0.04 of its potential returns per unit of risk. Putnam Global Income is currently generating about 0.03 per unit of risk. If you would invest 92.00 in Wt Mutual Fund on September 5, 2024 and sell it today you would earn a total of 8.00 from holding Wt Mutual Fund or generate 8.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.2% |
| Values | Daily Returns |
Wt Mutual Fund vs. Putnam Global Income
Performance |
| Timeline |
| Wt Mutual Fund |
| Putnam Global Income |
Wt Mutual and Putnam Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wt Mutual and Putnam Global
The main advantage of trading using opposite Wt Mutual and Putnam Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wt Mutual 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.| Wt Mutual vs. Vanguard Total Stock | Wt Mutual vs. Vanguard 500 Index | Wt Mutual vs. Vanguard Total Stock | Wt Mutual vs. Vanguard Total Stock |
| Putnam Global vs. Putnam Multi Cap Growth | Putnam Global vs. Putnam Multi Cap Growth | Putnam Global vs. Putnam Sustainable Future | Putnam Global vs. Putnam Equity Income |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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