Correlation Between Marsico International and Putnam Global

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

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

Diversification Opportunities for Marsico International and Putnam Global

0.66

Correlation Coefficient

Marsico International  Putnam Global

Poor diversification

The 3 months correlation between Marsico and Putnam is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Marsico International Opportun and Putnam Global Financials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Global Financials and Marsico International 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 Marsico International 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 Financials has no effect on the direction of Marsico International i.e., Marsico International and Putnam Global go up and down completely randomly.

Pair Corralation between Marsico International and Putnam Global

Assuming the 90 days horizon Marsico International Opportunities is expected to generate 2.36 times more return on investment than Putnam Global. However, Marsico International is 2.36 times more volatile than Putnam Global Financials. It trades about 0.1 of its potential returns per unit of risk. Putnam Global Financials is currently generating about 0.06 per unit of risk. If you would invest  1,899  in Marsico International Opportunities on October 9, 2024 and sell it today you would earn a total of  575.00  from holding Marsico International Opportunities or generate 30.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	78.46%
Values	Daily Returns

Marsico International Opportun  vs.  Putnam Global Financials

Marsico International

Risk-Adjusted Performance

0 of 100

Very Weak

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

Putnam Global Financials

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Putnam Global Financials has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong primary 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 Marsico International and Putnam Global

The main advantage of trading using opposite Marsico International and Putnam Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marsico International 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 Marsico International Opportunities and Putnam Global Financials 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 CEOs Directory module to screen CEOs from public companies around the world.