Correlation Between ANT and Putnam Global

Can any of the company-specific risk be diversified away by investing in both ANT 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 ANT and Putnam Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ANT and Putnam Global Technology, you can compare the effects of market volatilities on ANT 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 ANT with a short position of Putnam Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANT and Putnam Global.

Diversification Opportunities for ANT and Putnam Global

0.17

Correlation Coefficient

ANT  Putnam Global

Average diversification

The 3 months correlation between ANT and Putnam is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding ANT and Putnam Global Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Global Technology and ANT 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 ANT 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 Technology has no effect on the direction of ANT i.e., ANT and Putnam Global go up and down completely randomly.

Pair Corralation between ANT and Putnam Global

Assuming the 90 days trading horizon ANT is expected to generate 14.24 times more return on investment than Putnam Global. However, ANT is 14.24 times more volatile than Putnam Global Technology. It trades about 0.09 of its potential returns per unit of risk. Putnam Global Technology is currently generating about 0.04 per unit of risk. If you would invest  147.00  in ANT on October 25, 2024 and sell it today you would earn a total of  0.00  from holding ANT or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	85.71%
Values	Daily Returns

ANT  vs.  Putnam Global Technology

ANT

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ANT are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, ANT exhibited solid returns over the last few months and may actually be approaching a breakup point.

Putnam Global Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Putnam Global Technology has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Putnam Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with ANT and Putnam Global

The main advantage of trading using opposite ANT and Putnam Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANT 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 ANT and Putnam Global Technology 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.

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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.