Correlation Between Mobileye Global and Putnam Growth

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

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

Diversification Opportunities for Mobileye Global and Putnam Growth

0.65

Correlation Coefficient

Mobileye Global  Putnam Growth

Poor diversification

The 3 months correlation between Mobileye and Putnam is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Mobileye Global Class and Putnam Growth Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Growth Opport and Mobileye 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 Mobileye Global Class are associated (or correlated) with Putnam Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Growth Opport has no effect on the direction of Mobileye Global i.e., Mobileye Global and Putnam Growth go up and down completely randomly.

Pair Corralation between Mobileye Global and Putnam Growth

Given the investment horizon of 90 days Mobileye Global Class is expected to under-perform the Putnam Growth. In addition to that, Mobileye Global is 2.84 times more volatile than Putnam Growth Opportunities. It trades about -0.07 of its total potential returns per unit of risk. Putnam Growth Opportunities is currently generating about -0.12 per unit of volatility. If you would invest  6,632  in Putnam Growth Opportunities on December 22, 2024 and sell it today you would lose (699.00) from holding Putnam Growth Opportunities or give up 10.54% of portfolio value over 90 days.

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

Mobileye Global Class  vs.  Putnam Growth Opportunities

Mobileye Global Class

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mobileye Global Class has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's essential indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Putnam Growth Opport

Risk-Adjusted Performance

Very Weak

Over the last 90 days Putnam Growth Opportunities 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.

Pair Trading with Mobileye Global and Putnam Growth

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

The idea behind Mobileye Global Class and Putnam Growth Opportunities 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.

Check out your portfolio center.

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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.