Correlation Between Mainstay 130/30 and Putnam Global

Can any of the company-specific risk be diversified away by investing in both Mainstay 130/30 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 Mainstay 130/30 and Putnam Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Mainstay 13030 International and Putnam Global Financials, you can compare the effects of market volatilities on Mainstay 130/30 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 Mainstay 130/30 with a short position of Putnam Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay 130/30 and Putnam Global.

Diversification Opportunities for Mainstay 130/30 and Putnam Global

0.54

Correlation Coefficient

Mainstay 130/30  Putnam Global

Very weak diversification

The 3 months correlation between Mainstay and Putnam is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay 13030 International 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 Mainstay 130/30 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 Mainstay 13030 International 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 Mainstay 130/30 i.e., Mainstay 130/30 and Putnam Global go up and down completely randomly.

Pair Corralation between Mainstay 130/30 and Putnam Global

Assuming the 90 days horizon Mainstay 13030 International is expected to generate 1.01 times more return on investment than Putnam Global. However, Mainstay 130/30 is 1.01 times more volatile than Putnam Global Financials. It trades about -0.22 of its potential returns per unit of risk. Putnam Global Financials is currently generating about -0.35 per unit of risk. If you would invest  797.00  in Mainstay 13030 International on October 9, 2024 and sell it today you would lose (22.00) from holding Mainstay 13030 International or give up 2.76% of portfolio value over 90 days.

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

Mainstay 13030 International  vs.  Putnam Global Financials

Mainstay 13030 Inter

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mainstay 13030 International has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Mainstay 130/30 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 Mainstay 130/30 and Putnam Global

The main advantage of trading using opposite Mainstay 130/30 and Putnam Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay 130/30 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 Mainstay 13030 International 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.