Correlation Between Harbor Diversified and Putnam Global

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

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

Diversification Opportunities for Harbor Diversified and Putnam Global

0.99

Correlation Coefficient

Harbor Diversified  Putnam Global

No risk reduction

The 3 months correlation between Harbor and Putnam is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Harbor Diversified Internation and Putnam Global Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Global Equity and Harbor Diversified 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 Harbor Diversified International 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 Equity has no effect on the direction of Harbor Diversified i.e., Harbor Diversified and Putnam Global go up and down completely randomly.

Pair Corralation between Harbor Diversified and Putnam Global

Assuming the 90 days horizon Harbor Diversified is expected to generate 1.03 times less return on investment than Putnam Global. In addition to that, Harbor Diversified is 1.02 times more volatile than Putnam Global Equity. It trades about 0.12 of its total potential returns per unit of risk. Putnam Global Equity is currently generating about 0.12 per unit of volatility. If you would invest  1,546  in Putnam Global Equity on December 29, 2024 and sell it today you would earn a total of  97.00  from holding Putnam Global Equity or generate 6.27% return on investment over 90 days.

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

Harbor Diversified Internation  vs.  Putnam Global Equity

Harbor Diversified

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Harbor Diversified International are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Harbor Diversified is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Putnam Global Equity

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Putnam Global Equity are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Putnam Global may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Harbor Diversified and Putnam Global

The main advantage of trading using opposite Harbor Diversified and Putnam Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harbor Diversified 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 Harbor Diversified International and Putnam Global Equity 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.