Correlation Between L Abbett and Putnam Global

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Can any of the company-specific risk be diversified away by investing in both L Abbett 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 L Abbett and Putnam Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between L Abbett Fundamental and Putnam Global Income, you can compare the effects of market volatilities on L Abbett 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 L Abbett with a short position of Putnam Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of L Abbett and Putnam Global.

Diversification Opportunities for L Abbett and Putnam Global

LAVVXPutnamDiversified AwayLAVVXPutnamDiversified Away100%
0.44
  Correlation Coefficient

Very weak diversification

The 3 months correlation between LAVVX and Putnam is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding L Abbett Fundamental 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 L Abbett 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 L Abbett Fundamental 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 L Abbett i.e., L Abbett and Putnam Global go up and down completely randomly.

Pair Corralation between L Abbett and Putnam Global

Assuming the 90 days horizon L Abbett Fundamental is expected to generate 3.2 times more return on investment than Putnam Global. However, L Abbett is 3.2 times more volatile than Putnam Global Income. It trades about 0.12 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  1,532  in L Abbett Fundamental on October 25, 2024 and sell it today you would earn a total of  90.00  from holding L Abbett Fundamental or generate 5.87% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy98.33%
ValuesDaily Returns

L Abbett Fundamental  vs.  Putnam Global Income

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 -2-101234
JavaScript chart by amCharts 3.21.15LAVVX PGGEX
       Timeline  
L Abbett Fundamental 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in L Abbett Fundamental are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, L Abbett is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan1515.215.415.615.81616.2
Putnam Global Income 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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 technical and 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.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan9.759.89.859.99.9510

L Abbett and Putnam Global Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.41-1.81-1.2-0.60.00.621.261.892.52 123456
JavaScript chart by amCharts 3.21.15LAVVX PGGEX
       Returns  

Pair Trading with L Abbett and Putnam Global

The main advantage of trading using opposite L Abbett and Putnam Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if L Abbett 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 L Abbett Fundamental 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.

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