Correlation Between Blackrock Resources and Putnam Global

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

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

Diversification Opportunities for Blackrock Resources and Putnam Global

0.61

Correlation Coefficient

Blackrock Resources  Putnam Global

Poor diversification

The 3 months correlation between Blackrock and Putnam is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Resources Commoditie 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 Blackrock Resources 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 Blackrock Resources Commodities 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 Blackrock Resources i.e., Blackrock Resources and Putnam Global go up and down completely randomly.

Pair Corralation between Blackrock Resources and Putnam Global

Considering the 90-day investment horizon Blackrock Resources is expected to generate 1.58 times less return on investment than Putnam Global. But when comparing it to its historical volatility, Blackrock Resources Commodities is 1.25 times less risky than Putnam Global. It trades about 0.08 of its potential returns per unit of risk. Putnam Global Technology is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  7,060  in Putnam Global Technology on September 12, 2024 and sell it today you would earn a total of  508.00  from holding Putnam Global Technology or generate 7.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Blackrock Resources Commoditie  vs.  Putnam Global Technology

Blackrock Resources

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Blackrock Resources Commodities are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Blackrock Resources is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Putnam Global Technology

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Putnam Global Technology are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Putnam Global may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Blackrock Resources and Putnam Global

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

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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.