Correlation Between Jhancock Disciplined and Putnam Global

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

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

Diversification Opportunities for Jhancock Disciplined and Putnam Global

-0.08

Correlation Coefficient

Jhancock Disciplined  Putnam Global

Good diversification

The 3 months correlation between Jhancock and Putnam is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Jhancock Disciplined Value and Putnam Global Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Global Income and Jhancock Disciplined 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 Jhancock Disciplined Value 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 Income has no effect on the direction of Jhancock Disciplined i.e., Jhancock Disciplined and Putnam Global go up and down completely randomly.

Pair Corralation between Jhancock Disciplined and Putnam Global

Assuming the 90 days horizon Jhancock Disciplined Value is expected to generate 2.74 times more return on investment than Putnam Global. However, Jhancock Disciplined is 2.74 times more volatile than Putnam Global Income. It trades about 0.04 of its potential returns per unit of risk. Putnam Global Income is currently generating about 0.04 per unit of risk. If you would invest  1,945  in Jhancock Disciplined Value on September 26, 2024 and sell it today you would earn a total of  321.00  from holding Jhancock Disciplined Value or generate 16.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Jhancock Disciplined Value  vs.  Putnam Global Income

Jhancock Disciplined

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jhancock Disciplined Value 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 Income

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Putnam Global Income has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Putnam Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Jhancock Disciplined and Putnam Global

The main advantage of trading using opposite Jhancock Disciplined and Putnam Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jhancock Disciplined 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 Jhancock Disciplined Value and Putnam Global Income 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.