Correlation Between Kinetics Market and Putnam Global

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

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

Diversification Opportunities for Kinetics Market and Putnam Global

0.16

Correlation Coefficient

Kinetics Market  Putnam Global

Average diversification

The 3 months correlation between Kinetics and Putnam is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Market Opportunities 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 Kinetics Market 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 Kinetics Market Opportunities 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 Kinetics Market i.e., Kinetics Market and Putnam Global go up and down completely randomly.

Pair Corralation between Kinetics Market and Putnam Global

Assuming the 90 days horizon Kinetics Market Opportunities is expected to generate 1.24 times more return on investment than Putnam Global. However, Kinetics Market is 1.24 times more volatile than Putnam Global Technology. It trades about -0.04 of its potential returns per unit of risk. Putnam Global Technology is currently generating about -0.22 per unit of risk. If you would invest  7,893  in Kinetics Market Opportunities on October 11, 2024 and sell it today you would lose (168.00) from holding Kinetics Market Opportunities or give up 2.13% of portfolio value over 90 days.

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

Kinetics Market Opportunities  vs.  Putnam Global Technology

Kinetics Market Oppo

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kinetics Market Opportunities are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Kinetics Market showed solid returns over the last few months and may actually be approaching a breakup point.

Putnam Global Technology

Risk-Adjusted Performance

0 of 100

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 Kinetics Market and Putnam Global

The main advantage of trading using opposite Kinetics Market and Putnam Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Market 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 Kinetics Market Opportunities 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.