Correlation Between Voya Global and Putnam ETF

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

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

Diversification Opportunities for Voya Global and Putnam ETF

0.68

Correlation Coefficient

Voya Global  Putnam ETF

Poor diversification

The 3 months correlation between Voya and Putnam is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Voya Global Advantage and Putnam ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam ETF Trust and Voya Global 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 Voya Global Advantage are associated (or correlated) with Putnam ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam ETF Trust has no effect on the direction of Voya Global i.e., Voya Global and Putnam ETF go up and down completely randomly.

Pair Corralation between Voya Global and Putnam ETF

Considering the 90-day investment horizon Voya Global is expected to generate 1.21 times less return on investment than Putnam ETF. But when comparing it to its historical volatility, Voya Global Advantage is 1.37 times less risky than Putnam ETF. It trades about 0.21 of its potential returns per unit of risk. Putnam ETF Trust is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  2,208  in Putnam ETF Trust on December 28, 2024 and sell it today you would earn a total of  221.00  from holding Putnam ETF Trust or generate 10.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.36%
Values	Daily Returns

Voya Global Advantage  vs.  Putnam ETF Trust

Voya Global Advantage

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Voya Global Advantage are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent technical and fundamental indicators, Voya Global may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Putnam ETF Trust

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Putnam ETF Trust are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak forward indicators, Putnam ETF may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Voya Global and Putnam ETF

The main advantage of trading using opposite Voya Global and Putnam ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Global position performs unexpectedly, Putnam ETF 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 ETF will offset losses from the drop in Putnam ETF's long position.

The idea behind Voya Global Advantage and Putnam ETF Trust 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.