Correlation Between Goehring Rozencwajg and Putnam Global

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

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

Diversification Opportunities for Goehring Rozencwajg and Putnam Global

0.46

Correlation Coefficient

Goehring Rozencwajg  Putnam Global

Very weak diversification

The 3 months correlation between Goehring and Putnam is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Goehring Rozencwajg Resources 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 Goehring Rozencwajg 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 Goehring Rozencwajg Resources 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 Goehring Rozencwajg i.e., Goehring Rozencwajg and Putnam Global go up and down completely randomly.

Pair Corralation between Goehring Rozencwajg and Putnam Global

Assuming the 90 days horizon Goehring Rozencwajg Resources is expected to generate 0.89 times more return on investment than Putnam Global. However, Goehring Rozencwajg Resources is 1.12 times less risky than Putnam Global. It trades about 0.07 of its potential returns per unit of risk. Putnam Global Technology is currently generating about -0.1 per unit of risk. If you would invest  1,224  in Goehring Rozencwajg Resources on December 21, 2024 and sell it today you would earn a total of  72.00  from holding Goehring Rozencwajg Resources or generate 5.88% return on investment over 90 days.

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

Goehring Rozencwajg Resources  vs.  Putnam Global Technology

Goehring Rozencwajg

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Goehring Rozencwajg Resources are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Goehring Rozencwajg may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Putnam Global Technology

Risk-Adjusted Performance

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 latest weak performance, the Fund's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Goehring Rozencwajg and Putnam Global

The main advantage of trading using opposite Goehring Rozencwajg and Putnam Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goehring Rozencwajg 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 Goehring Rozencwajg Resources 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.