Correlation Between Vy Umbia and Putnam Global

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

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

Diversification Opportunities for Vy Umbia and Putnam Global

-0.52

Correlation Coefficient

Vy Umbia  Putnam Global

Excellent diversification

The 3 months correlation between ICSAX and PUTNAM is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Vy Umbia Small 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 Vy Umbia 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 Vy Umbia Small 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 Vy Umbia i.e., Vy Umbia and Putnam Global go up and down completely randomly.

Pair Corralation between Vy Umbia and Putnam Global

Assuming the 90 days horizon Vy Umbia Small is expected to under-perform the Putnam Global. In addition to that, Vy Umbia is 1.26 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 0.16 per unit of volatility. If you would invest  1,449  in Putnam Global Equity on December 21, 2024 and sell it today you would earn a total of  110.00  from holding Putnam Global Equity or generate 7.59% return on investment over 90 days.

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

Vy Umbia Small  vs.  Putnam Global Equity

Vy Umbia Small

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vy Umbia Small has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Putnam Global Equity

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Putnam Global Equity are ranked lower than 12 (%) 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 April 2025.

Pair Trading with Vy Umbia and Putnam Global

The main advantage of trading using opposite Vy Umbia and Putnam Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vy Umbia 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 Vy Umbia Small 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.